Prospectus
Hugo Games A/S
(a Danish public limited liability company)

Rights Issue of 20,000,000 Offer Shares
at a Subscription Price of NOK 1.50 per Offer Share
with Subscription Rights for Existing Shareholders

Subscription Period for the Rights Issue: From 27 June 2016 to 16:30 hours (CEST) on 11 July 2016
Trading in Subscription Rights: From 27 June 2016 to 16:30 hours (CEST) on 7 July 2016

The information in this prospectus (the “Prospectus”) relates to a rights issue (the “Rights Issue”) and subsequent listing on Oslo Axess, of 20,000,000 shares (the “Offer Shares”), each with a nominal value of DKK 0.50 at a subscription price of NOK 1.50 (the “Subscription Price”) in Hugo Games A/S (the “Company”), a public limited liability company incorporated under the laws of Denmark (together with its consolidated subsidiaries, “Hugo Games” or the “Group”). Existing shareholders of the Company as of the end of 22 June 2016 (as registered in the Company’s shareholder register in the Norwegian Central Securities Depository (“Verdipapirsentralen” or “VPS”) as of 24 June 2016 (the “Record Date”)) (the “Existing Shareholders”) will be granted 0.7913224220 tradable subscription rights (“Subscription Rights”) for every 1 share in the Company held as of the Record Date. The holders of Subscription Rights will, subject to applicable law, be entitled to subscribe for and be allocated one Offer Share for each Subscription Right held. The Subscription Rights will be registered on each Existing Shareholder’s account in the VPS. Subscription Rights will not be issued in respect of Existing Shares held in treasury by the Company. Over-subscription and subscription without Subscription Rights is permitted. The subscription period for the Rights Issue will commence at 09:00 hours (Central European Time, “CEST”) on 27 June 2016, and expire on 11 July 2016 at 16:30 hours (CEST) (the “Subscription Period”). The Subscription Rights will be listed and tradable on the Oslo Stock Exchange under the ticker code “HUGO T” from 27 June 2016 to 16:30 hours (CEST) on 7 July 2016. The due date for the payment for the Offer Shares will be on or about 15 July 2016. Delivery of the Offer Shares is expected to take place on or about 22 July 2016. The Offer Shares will be delivered through the facilities of the VPS. Trading in the Offer Shares on the Oslo Stock Exchange is expected to commence on or about 22 July 2016.

SUBSCRIPTION RIGHTS THAT ARE NOT USED TO SUBSCRIBE FOR OFFER SHARES BEFORE THE EXPIRY OF THE SUBSCRIPTION PERIOD, OR THAT ARE NOT SOLD BEFORE 7 JULY AT 16:30 HOURS (CEST), WILL HAVE NO VALUE AND WILL LAPSE WITHOUT COMPENSATION TO THE HOLDER.

The Offer Shares will be registered in the VPS in book entry form and will carry full voting rights. All the Company’s shares (the “Shares”) rank in parity with one another and carry one vote per Share. Except where the context otherwise requires, references in this Prospectus to the Shares include the Offer Shares. The Shares are listed on the Oslo Stock Exchange under the ticker code “HUGO”.

Investing in the Company and the Shares, including trading in the Subscription Rights, involves material risks and uncertainties. See Share Securities Note Section 1 “Risk Factors” and page 2-3 “Note Regarding Forward-Looking Statements”.

Manager
Norne Securities AS
22 June 2016

Important notice

Please see pages 148-150 for definitions, which also apply to the front page.

This Prospectus, dated 22 June 2016, has been prepared by the Company in order to provide a presentation of the Company and its business in connection with the offering of Offer Shares of the Company through the Rights Issue and the admission of the Offer Shares to trading and listing on Oslo Børs. As this Rights Issue is addressed to the Company's shareholders, the level of disclosure in this Prospectus is proportionate to this type of issue cf. EC Commission Regulation EC/809/2004 article 26a (3). The Prospectus has further been prepared to comply with the Danish Securities Trading Act and related legislation and regulations. The Prospectus has been prepared in the English language with a Danish summary.

The Company has furnished the information in this Prospectus.

All inquiries relating to this Prospectus must be directed to the Company or the Manager. No other person is authorized to give any information about or to make any representations on behalf of the Company in connection with the Rights Issue. If any such information is given or made, it must not be relied upon as having been authorized by the Company or by the Manager.

The information contained herein is of the date hereof and subject to change, completion and amendment without notice. In accordance with Danish legislation, every new circumstance, material error, or inaccuracies which may have significance for the assessment of the Offer Shares, and which are brought to light between approval of the Prospectus and admission to trading of the Offer Shares, will be included in a supplement to the Prospectus. Such supplementary prospectus shall be approved by the Financial Supervisory Authority and be published. Publication of this Prospectus shall not create any implication that there has been no change in the Company's affairs or that the information herein is correct as of any date subsequent to the date of the Prospectus.

The contents of this Prospectus are not to be construed as legal, business, financial or tax advice. Each reader of this Prospectus should consult with its own legal, business, financial or tax advisor as to legal, business, financial or tax advice. If you are in any doubt about the contents of this Prospectus you should consult your stockbroker, bank manager, lawyer, accountant or other professional adviser before making any investment decision.

This Prospectus is subject to Danish law. Any dispute arising in respect of or in connection with this Prospectus or the Rights Issue is subject to the exclusive jurisdiction of the Danish courts with applicable Danish court as legal venue.

Prospective investors are expressly advised that an investment in the Company's shares entails financial and legal risk and that they should therefore read this Prospectus entirely and particularly the section entitled "Risk Factors", starting on page 26 when considering an investment in the Company's shares.

The distribution of this Prospectus may in certain jurisdictions be restricted by law. Persons in possession of this Prospectus are required to inform themselves about and to observe any such restrictions. This Prospectus does not constitute an offer of, or a solicitation of an offer to purchase, any of the Offer Shares in any jurisdiction or in any circumstances in which such offer or solicitation would be unlawful. No one has taken any action that would permit a public offering of Offer Shares to occur outside of Denmark and Norway.

The Offer Shares have not been and will not be registered under the U.S. Securities Act of 1933 as amended (the "Securities Act"), or with any securities authority of any state of the United States.

The Offer Shares may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States, Canada, Japan or Australia.

Note Regarding Forward-Looking Statements

This Prospectus includes "forward-looking" statements, including, without limitation, projections and expectations regarding the Company's future business strategy, plans and objectives. All forward-looking statements included in this document are based on information available to the Company, and views and assessments of the Company, as of the date of this Prospectus. The Company expressly disclaims any obligation or undertaking to release any updates or revisions of the forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, unless such update or revision is prescribed by law. When used in this document, the words "anticipate", "believe", "estimate", "expect", "seek to" and similar expressions, are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company, to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate. Factors that could cause the Company's actual results, performance or achievements to materially differ from those in the forward-looking statements include but are not limited to global and regional economic conditions, the competitive nature of the market in which the Company operates, growth management, changes in domestic and foreign laws and regulations, taxes, changes in competition and pricing environments, changes in political events, force majeure events and other factors referred to in this Prospectus.

DANSK RESUME...6
ENGLISH SUMMARY...15
SHARE SECURITIES NOTE...25
1. RISK FACTORS...25
1.1 Risk factors relating to the Company - Operational risks...25
1.2 Risk factors relating to the Company - Financial risks...26
1.3 Risk factors relating to the Company - Market risks...27
1.4 Risk factors relating to the Company - Other risks...28
1.5 Risk factors material to the securities...29
1.6 Risk factors material to the Rights Issue...30
2. RESPONSIBILITY STATEMENT...32
2.1 Persons responsible for the Prospectus...32
3. KEY INFORMATION...33
3.1 Working capital statement...33
3.2 Capitalization and indebtedness...33
3.3 Interest of natural and legal persons involved in the Rights Issue...34
3.4 Reasons for completion of the Rights Issue...35
4. INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING...36
4.1 Description of the type and the class of the Shares...36
4.2 Legislation...36
4.3 Registration of Shares, proof of ownership...36
4.4 Rights attached to the Shares...36
4.5 Resolutions, authorisations and approvals...38
4.6 Issue date for the shares in the Rights Issue...40
4.7 Restrictions on the free transferability of Shares...40
4.8 Public takeover bids...42
4.9 Squeeze-out and redemption...42
4.10 Taxation of shareholders and holders of subscription rights...43
5. TERMS AND CONDITIONS OF THE RIGHTS ISSUE...52
5.1 The Rights Issue...52
5.2 Conditions for completion of the Rights Issue...52
5.3 Timetable...53
5.4 Subscription period...53
5.5 Record date for Existing Shareholders...53
5.6 Subscription Rights...53
5.7 Trading in Subscription Rights...54
5.8 Subscription Offices and subscription procedures...55
5.9 Allocation, payment and delivery of Offer Shares...56
5.10 Financial Intermediaries...57
5.11 Manager and Underwriting...59
6. TRADING AND DEALING ARRANGEMENTS...60
7. LOCK-UP AGREEMENTS...63
7.1 Lock-up agreements...63
8. EXPENSE OF THE ISSUE...63
9. DILUTION...63
10. ADDITIONAL INFORMATION...63
10.1 Advisors connected with the Rights Issue...63
10.2 Information in the Securities Note which has been audited or reviewed by statutory auditors...63
10.3 Statement regarding expert opinions...63
10.4 Third Party Information...63
SHARE REGISTRATION DOCUMENT...64
1. STATUATORY AUDITORS...64
1.1 Current auditor...64
2. SELECTED FINANCIAL INFORMATION...65
3. INFORMATION ABOUT THE ISSUER...66
3.1 History and Development of the Company...66
3.2 Investments...67

3.2.1 Principal investments ... 67
3.2.2 Investments in progress ... 67
3.2.3 Investment plan ... 67
4. BUSINESS OVERVIEW ... 67
4.1 Principal activities and markets ... 67
4.1.1. EXECUTIVE SUMMARY ... 68
4.1.2. HUGO GAMES ACTIVITIES ... 69
4.1.3. HUGO'S HISTORY ... 70
4.1.4. THE INDUSTRY ... 73
4.1.5. OUR STRATEGY ... 76
4.1.6. EXISTING GAMES ... 84
4.1.7. UPCOMING GAMES ... 86
4.1.8. LICENSING & MERCHANDISING ... 89
4.1.9. GEOGRAPHICAL FOCUS ... 91
4.1.10. OUR MARKETING EFFORTS ... 99
4.1.11. SOCIAL PUBLIC RELATIONS ... 108
4.2 Exceptional factors ... 109
4.3 IPR and material contracts ... 109
4.4 The basis for any statements made by the issuer regarding its competitive position ... 109
5. ORGANIZATIONAL STRUCTURE ... 110
6. PROPERTY, PLANTS AND EQUIPMENT ... 110
7. OPERATING AND FINANCIAL REVIEW ... 110
8. CAPITAL RESOURCES ... 111
8.1 The Company's capital resources ... 111
8.2 Narrative description of the Company's cash flows ... 112
8.3 Restrictions on the use of capital ... 113
9. RESEARCH AND DEVELOPMENT, IPR AND LICENCES ... 114
10. TREND INFORMATION ... 116
11. PROFIT FORECASTS OR ESTIMATES ... 122
12. MANAGEMENT AND SUPERVISORY BODIES ... 123
12.1 Executive management, and supervisory bodies ... 123
12.2 Conflicts of interest ... 125
13. REMUNERATION AND BENEFITS ... 126
13.1 Remuneration to Board Members and Executive Management in 2015/2016 ... 126
13.2 Amounts set aside to provide pensions or similar benefits ... 126
14. BOARD PRACTICES ... 127
14.1 Date of expiration of the term of office for the current Board of Directors of the Company ... 127
14.2 Service contracts providing benefits upon termination of employment ... 127
14.3 Information of audit, remuneration and nomination committee ... 127
14.4 Corporate governance ... 128
15. EMPLOYEES ... 130
15.1 Number of employees ... 130
15.2 Shareholdings and warrants ... 130
15.3 Option programs and other incentive programs ... 130
16. MAJOR SHAREHOLDERS ... 132
16.1 Shareholders ... 132
16.2 Voting rights ... 132
16.3 Control of the Company ... 132
17. RELATED PARTY TRANSACTIONS ... 133
18. FINANCIAL INFORMATION CONCERNING THE ISSUER'S ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES - ... 134
18.1 Historical Financial Information ... 134
18.2 Auditing of historical financial information ... 134
18.3 Dividend and shareholder policy ... 134
18.4 Legal and arbitration proceedings ... 134
18.5 Significant change in the Company's financial or trading position ... 135
19. ADDITIONAL INFORMATION ... 136
19.1 Share Capital ... 136

19.2 Memorandum and Articles of association ... 142
20. MATERIAL CONTRACTS ... 147
21. THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST ... 148
22. DOCUMENTS ON DISPLAY ... 148
23. INFORMATION ON HOLDINGS ... 150
DEFINITIONS AND GLOSSARY FOR THE PROSPECTUS IN GENERAL ... 151
GLOSSARY FOR CHAPTER 4.1 IN THE SHARE REGISTRATION DOCUMENT ... 152
Appendix 1 – Current articles of association of Hugo Games A/S ... 154
Appendix 2 – Annual accounts 2014 and 2015 (IFRS) ... 163
Appendix 3 – Interim accounts Q1 2016 (IFRS) ... 218
Appendix 4 – Opinion from the Company’s auditor concerning the Company’s forecasts ... 226
Appendix 5 – Subscription form ... 227

DANSK RESUME

Resuméer består af oplysningskrav, der benævnes elementer (herefter "Elementer"). Disse Elementer er nummereret i afsnit A – E (A.1 – E.7).

Dette resumé indeholder alle de Elementer, der skal være indeholdt i et resumé for denne type af værdipapirer og udsteder. Da nogle Elementer ikke skal medtages, kan der forekomme huller i nummereringen af Elementerne.

Selv om et Element skal indsættes i et resumé på grund af typen af værdipapirer og udsteder, er det muligt, at der ikke kan gives nogen relevante oplysninger om Elementet. I så fald skal resuméet indeholde en kort beskrivelse af Elementet med angivelse af ”ikke relevant”.

Nærværende danske resumé er en oversættelse af det engelske resumé og resuméet er en del af det engelsksprogede prospekt. Såfremt der måtte være information i det danske resumé, som strider imod indholdet i det engelske resumé, vil det engelske resumé have forrang

Afsnit A — Indledning og advarsler
Modul	Oplysningskrav	Bemærkninger
A.1	Advarsel	Dette resumé bør læses som en indledning til prospektet:
• Enhver beslutning om investering i værdipapirerne af investoren bør træffes på baggrund af prospektet som helhed.
• Hvis en sag vedrørende oplysningerne i prospektet indbringes for en domstol i henhold til national lovgivning i medlemsstaterne, kan den sagsøgende investor være forpligtet til at betale omkostningerne i forbindelse med oversættelse af prospektet, inden sagen indledes.
• Kun de personer, som har indgivet resuméet eller eventuelle oversættelser heraf, kan ifalde et civilretligt erstatningsansvar, men kun såfremt resuméet er misvisende, ukorrekt eller uoverensstemmende, når det læses sammen med de andre dele af prospektet, eller ikke, når det læses sammen med prospektets andre dele, indeholder nøgleoplysninger, således at investorerne lettere kan tage stilling til, om de vil investere i de pågældende værdipapirer.
A.2	Tilsagn til formidlere	Ikke relevant. Intet videresalg vil finde sted. Ingen finansielle formidlere vil blive anvendt ved den endelige allokering af udbuddet.
Afsnit B — Udsteder
Modul	Oplysningskrav	Bemærkninger
B.1	Juridiske navn	Udsteders juridiske navn er Hugo Games A/S (herefter "Selskabet").
B.2	Domicil, juridisk form og indregistreringsland	Selskabet er et dansk aktieselskab, der er underlagt reglerne i selskabsloven.
Selskabets domicil er Gammel Kongevej 120 1th, 1850 Frederiksberg.

| B.3 | Virksomhedsbeskrivelse | Hugo Games A/S er et “mobile gaming” (mobilspil) selskab etableret i 2011, som udvikler interaktivt underholdningsmateriale på forskellige platforme, herunder spil og animerede serier, baseret på Selskabets immaterielle rettigheder til trolden ”Hugo”.

Selskabet har tænkt sig at fortsætte etableringen af karakteren Hugo på markedet for mobilspil sammen med andre relevante spil-lanceringer med etablerede IP’er og koncepter, herunder også med en række ”celebrities”, såsom aftalen med den professionelle portugisiske fodboldspiller Christiano Ronaldo, den amerikanske NFL fodboldspiller Cameron Newton og den amerikanske skateboarder Nyjah Houston.

De nye spil vil blive i kategorien ”casual game”, hvori både Hugo, Christiano Ronaldo, Cameron Newton og Nyjah Houston vil være en del af spillene, der også vil inkludere flere funktioner tilknyttet sociale medier.

Selskabet opererer på det globale marked for mobilspil. Forretningsmodellen ”free-to-play” dominerer på mobilspil markedet, og mikro-transaktioner inden i selve spillet (reklamer og in-app køb) er nøgleelementer i at opnå indtægter. Væsentlige markeder, hvor udsteder er aktiv, er Apple Store og Google Play. |
| --- | --- | --- |
| B.4a | Væsentlige nyere tendenser | Markedet, som Selskabet opererer på, oplever en betydelig vækst, som formodentlig vil få væsentlig indvirkning på Selskabet, eller de sektorer inden for hvilke Selskabet opererer. Markedet for mobilspil drives af den stærke globale stigning i antallet af smartphones |
| B.5 | Koncernoversigt | Selskabet er moderselskab for Hugo Games Development ApS og Ivanoff Interactive A/S, der begge er 100% ejet og kontrolleret af Selskabet.

Selskabet er holdingselskab for Hugo-koncernen (herefter ”Koncernen”).

Hugo Games Development ApS er et dansk anpartsselskab, der er underlagt reglerne i den danske selskabslov, og er registreret hos Erhversstyrelsen med CVR nr. 3056 4235. Alle immaterielretlige forhold vedrørende HUGO-karakteren varetages af Hugo Games Development ApS.

Ivanoff Interactive A/S er et dansk aktieselskab, der er underlagt reglerne i den danske selskabslov, og er registreret hos Erhvervsstyrelsen med CVR nr. 2420 7811. Alle medarbejdere er ansat i dette selskab, og al udvikling/produktion af in-house udviklede spil varetages af Ivanoff Interactive A/S. |
| B.6 | Større aktionærer | Selskabets aktionærer har ikke forskellige stemmerettigheder.

Aula Holding ApS, ejet af CEO Henrik Kølle, ejer 47,8 % af aktierne i Hugo Games. |

B.7	Hugo Games A/S
	Konzerntal DKK 1000	IFRS	IFRS
	Tabs- og vindingssammenfatning	Audited 31.12.2015	Audited 31.12.2014
	total omsætning	3,198	6,344
	Driftsresultat	-33,909	-4,711
	Resultat før skat	-37,122	-5,028
	Resultat efter skat	-29,431	-3,629
		IFRS	IFRS
	Balancesammenfatning	Audited 31.12.2015	Audited 31.12.2014
	Sum af immaterielle aktiver	41,574	35,498
	Sum af materielle aktiver	64	21
	Sum af finanzielle aktiver	65	77
	Forudbetalinger	2,047	2,129
	Tilgodehavender	4,896	1,460
	Likvider	14,594	11,958
	Sum af aktiver	63,240	51,143
	Egenkapital	52,055	36,874
	Langfristet gæld	5,256	10,355
	Kortfristet gæld	5,929	3,934
	Sum af passiver og egenkapital	63,240	51,163
	Andet	31.12.2015	31.12.2014
	Antal aktier	25,000,000	20,000,000
	Udbytte	0.0	0.0
	Gæld ratio ( langfristet gæld/sum af aktiver)	0.08	0.20
	Indtjening per aktie (ultimo beholdning)	-1.18	-0.18
	Hugo Games A/S
	Konzerntal DKK 1000	IFRS	IFRS
	Tabs- og vindingssammenfatning	Review Q1 2016	Review Q1 2015
	total omsætning	792	909
	Driftsresultat	-6,014	-3,958
	Resultat før skat	-6,004	-4,092
	Resultat efter skat	-4,716	-3,492
		IFRS	IFRS
	Balancesammenfatning	Review 31.03.2016	Review 31.03.2015
	Sum af immaterielle aktiver	43,872	39,225
	Sum af materielle aktiver	57	15
	Sum af finanzielle aktiver	65	77
Forudbetalinger	1,691	2,283
Tilgodehavender	6,695	1,827
Likvider	7,461	12,261
Sum af aktiver	59,841	55,688
Egenkapital	48,289	39,131
Langfristet gæld	4,590	9,402
Kortfristet gæld	6,962	7,155
Sum af passiver og egenkapital	59,841	55,688
Andet	31.03.2016	31.03.2015
Antal aktier	25,274,148	20,000,000
Udbytte	0.0	0.0
Gæld ratio ( langfristet gæld/sum af aktiver)	0.08	0.17
Indtjening per aktie (ultimo beholdning)	-0.19	-0.17
Der har ikke været nogen væsentlige ændringer i koncernens finansielle eller handelsmæssige position siden udgangen af 31.03 2016


B.8	Proforma regnskabsoplysninger	Ikke relevant, da der ikke har været nogen væsentlige ændringer i Selskabets aktiver, passiver eller indtjening som ville nødvendiggøre proforma-regnskabsoplysninger.
B.9	Forventninger	Hugo Games A/S har oplyst resultatforventninger for 2016 i sin årsrapport for 2015 om visse nøgletal som angivet nedenfor. Disse tal blev gentaget i selskabets Q1 2016 rapport.
Bruttofortjenesten forventes at ligge i intervallet fra DKK 20 millioner til DKK 25 millioner.
EBITDA forventes at ligge i intervallet fra DKK 3,0 millioner til DKK 7,0 millioner.
B.10	Evt. Revisionsforbehold	Ikke relevant. Der er ikke forbehold i revisionsrapporten i forbindelse med de historiske regnskabsoplysninger.
B.11	Arbejdskapitalerklæring	På prospektets offentliggørelsestidspunkt, har selskabet, på baggrund af den nylige strategiske udvidelse af Selskabets portefølje og tilhørende markedsføringsaktivitet, ikke tilstrækkelig arbejdskapital til sine nuværende forpligtigelser for de kommende 12 måneder. Selskabets vurderer at der på nuværende tidspunkt er arbejdskapital frem til udgangen af juli 2016.

Selskabet har på datoen for Prospektet en kontant balance på DKK 1,0 millioner. DKK 8 millioner i yderligere finansiering vil være tilstrækkeligt til at finansiere Selskabets nuværende faste forpligtelser, vurderet til DKK 30 millioner, over de næste 12 måneder fra datoen for Prospektet, hvilket inkluderer finansiel forpligtelse til at udvide og udvikle nye spil i Selskabets spilportefølje samt udgifter til tilhørende løn og administrative aktiviteter i perioden.

Som følge heraf har Selskabets bestyrelse besluttet at gennemføre emissionen for at få finansieret Selskabets udvidelsesstrategi. Da de udbudte aktier i fortegningsemissionen er garanteret af en række investorer, og kombineret med den forventede indtjening fra spil mm., er det bestyrelsens opfattelse, at det samlede beløb vil være tilstrækkeligt til i hvert fald at dække Selskabets nuværende forpligtelser de næste 12 måneder. |
| Afsnit C — Værdipapirer | | |
| Modul | Oplysningskrav | Bemærkninger |
| C.1 | Type og klasse | Selskabet har kun én aktieklasse.
Aktierne er registreret i Verdipapirsentralen ASA, Norge (VPS) med ISIN DK0060637999. |

C.2	Valuta	Norske kroner (NOK).
C.3	Antal aktier og pålydende værdi	Selskabets aktiekapital er på datoen for prospektet nominelt DKK 12.637.074 fordelt på 25.274.148 aktier, på nominelt DKK 0,50, (herefter ”Aktie(r)/Aktierne”).

Aktiekapitalen er fuldt indbetalt og udstedt. |
| C.4 | Rettigheder | Selskabet har én aktieklasse. Alle Aktier har samme rettigheder i enhver henseende, herunder udbytterettigheder, og hver Aktie giver ret til én stemme på Selskabets generalforsamling.

Alle Aktier har samme rettigheder til udbytte. Retten til udbytte opnås fra tidspunktet for tildeling af Aktierne til investoren.

Alle generalforsamlingsbeslutninger træffes ved simpelt flertal, medmindre andet følger af selskabsloven eller selskabets vedtægter.

Efter dansk ret har alle Selskabets aktionærer som udgangspunkt fortegningsret, hvis generalforsamlingen beslutter at forhøje Selskabets aktiekapital ved kontant indskud. Aktionærenes fortegningsret kan imidlertid fraviges af et flertal på minimum 2/3 af de afgivne stemmer samt af den repræsenterede selskabskapital på generalforsamlingen såfremt kapitalforhøjelsen sker til markedskurs.

Indløsning af en aktionær kræver den pågældende aktionærs samtykke.

Såfremt et dansk kapitalselskab erhverver egne aktier, kan erhvervelsen kun ske for midler, som efter selskabsloven kan bruges til at udlodde ekstraordinært udbytte.

I tilfælde af en tvangsopløsning eller likvidation af Selskabet har Selskabets aktionærer krav på at modtage en forholdsmæssig andel af Selskabets nettoformue efter betaling af Selskabets kreditorer. |
| C.5 | En beskrivelse af eventuelle indskrænkninger i værdipapirernes omsættelighed | Ikke relevant. Alle Aktierne er frit omsættelige. |
| C.6 | Notering | Selskabets aktier er noteret og optaget til handel på Oslo Axess under ticker koden HUGO, og de udbudte aktier i fortegningsemissionen vil ligeledes blive noteret og optaget til handel. |
| C.7 | Udbyttepolitik | Ikke relevant. Selskabet har ikke til hensigt at udbetale udbytte til aktionærerne inden for den nærmeste fremtid. Udbetaling af udbytte sker efter bestyrelsens og flertallet på generalforsamlingens beslutning og afhænger af Selskabets økonomiske stilling, kapitalforhold, lovkrav og indtjening samt en række andre faktorer. |
| Afsnit D — Risici | | |
| Modul | Oplysningskrav | Bemærkninger |

| D.1 | Risici forbundet med udstederen | Følgende risici er specifikke for Selskabet eller dets branche:

Operationelle risici:
• Begrænset driftshistorie
• Konkurrence
• Tiltrækning og fastholdelse af nøglemedarbejdere
• Tvister
• Tab af omdømme
• Ændringer i gældende skattelovgivning
• Samarbejds- og licensaftaler
• Immaterielle rettigheder

Økonomiske risici
• Driftstab
• Muligheder for at rejse yderligere kapital
• Makroøkonomiske udsving
• Renteændringer
• Kursudsving
• Selskabets afhængighed af vellykket produktlanceringer, herunder forsinkelser ved spillancering

Markedsrisici
• Stærkt konkurrenceprægede markeder
• Kendskab til brand og genkendelighed
• Slutbrugerpræferencer
• Ringe placering på de virtuelle platforme
• Teknologi
• Indtægtskilder

Andre risici
• Handelsbarrierer
• Politiske begivenheder
• Ophør af partnerkontrakter |
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| D.3 | Risici forbundet med udbudet | Følgende risikofaktorer er specifikke for værdipapirerne:
• Prisudsving i aktiekursen
• Fremtidige salg af Aktierne
• Begrænset antal Aktier i fri handel (free float)
• Potentiel udvanding af aktionærerne
• Muligheden for at indlede retssager mod Selskabet kan være begrænset efter norsk ret
• Selskabet påtænker ikke at udbetale udbytte inden for den nærmeste fremtid
• Aktionærer uden for Norge er omfattet af en kursrisiko, da Udbuddet og den efterfølgende handel af Aktierne sker i valutaen NOK
• Aktionærer uden for Danmark er udsat for kursrisiko, da Selskabet vil udbetale eventuelt fremtidig udbytte i DKK

Følgende risikofaktorer er specifikke for Udbuddet:
• Selskabet vil have brede skønsmæssige beføjelser over anvendelsen af nettoprovenuet
• Selskabets større aktionærers interesser kan afvige fra de øvrige investorers interesser
• Aktionærer i USA samt andre aktionærer kan være afskåret fra at udnytte fortegningsrettigheder
• Eksisterende aktionærer, som ikke deltager i emissionen kan opleve betydelig udvanding af deres ejerandel.
• Markedet for fortegningsretterne kan vise sig inaktivt på Oslo Børs og / eller markedsværdien af tegningsretterne kan være svingende
• Hvis emissionen trækkes tilbage, eller af en eller anden grund ikke gennemføres, vil Tegningsretterne være værdiløse |
| Afsnit E — Udbuddet | | |

Modul	Oplysningskrav	Bemærkninger
E.1	Provenu og udgifter ved udbuddet	Bruttoprovenuet til Selskabet i fortegningsemissionen udgør NOK 30 millioner. Minimum som kostningerne til fortegningsemissionen forventes at anløbe til cirka NOK 5.3 millioner.

Selskabet dækker transaktionsomkostninger og alle andre omkostninger, der er direkte forbundet med emissionen.

Efter fratræk af transaktionsomkostninger vil det samlede nettoprovenu til Selskabet fra fortegningsemissionen være cirka NOK 24.7 millioner. |
| E.2a | Baggrund for uddbudet og anvendelse af provenu | Emissionen gennemføres for at sikre tilstrækkelig kapital til gennemførelse af koncernens 3-fold strategi, herunder, men ikke begrænset til, de nuværende aktiviteter samt udvidelse af produktporteføljen, markedsføringsaktiviteterne samt yderligere opbygningen af organisationen.

Nettoprovenuet på cirka NOK 25 millioner fra emissionen og cash flowet fra driften vil primært blive anvendt til at finansiere markedsføring og fremme udviklingen af Selskabets spilportefølje. |

| E.3 | Vilkår og betingelser for udbuddet | Fortegningsemissionen består af et primært udbud på 20.000.000 nye aktier, der udbydes af Selskabet med en tegningskurs på NOK 1,50 med det formål at rejse NOK 30 millioner (herefter de ”Udbudte aktier”).

Eksisterende Aktionærer vil blive tildelt omsættelige tegningsretter, som, med forbehold af gældende lov, giver fortrinsret til nytegning og allokering i fortegningsemissionen. Overtegning og tegning uden tegningsretter vil blive tilladt; dog kan ikke garanteres allokering i disse tilfælde.

I forbindelse med emissionen har Selskabet modtaget tegningsgaranti fra et syndikat af garantistillere. Den samlede tegningsgaranti svarer til fortegningsemissionens beløb på NOK 30 millioner.

Tegningsperioden begynder den 27. juni 2016 kl 09:00 CEST og slutter den 11. juli 2016 kl. 16:30 (CEST). Aktionærer, der er registreret i selskabets aktiebog hos værdipapircentralen på registreringsdatoen (24. juni 2016) modtager tegningsretter. Under forudsætning af at afviklingen af handlede aktier sker på de almindelige betingelser (T + 2 afvikling i VPS), vil aktier, som er anskaffet på eller før den 22. juni 2016 give ret til at modtage tegningsretter, mens Aktier, som er anskaffet fra og med den 23. juni 2016 ikke vil give ret til at modtage tegningsretter.

Eksisterende Aktionærer vil blive tildelt tegningsretter, der giver fortrinsret til nytegning og allokering i fortegningsemissionen. Alle eksisterende Aktionær vil blive tildelt 0,7913224220 tegningsret for hver 1 aktie, der er registreret ved udløbet af registreringsdatoen.

Tegningsretterne vil være fuldt omsættelige og noteret på Oslo Børs med ticker kode ”HUGO T” fra kl.09:00 (CEST) den 27. juni 2016 indtil kl. 16:30 (CEST) den 7. juli 2016. Tegningsretter, der ikke anvendes til at tegne de udbudte aktier inden udløbet af tegningsperioden, eller som ikke er solgt før den 7. juli 2016 kl. 16:30 (CEST), vil ikke have nogen værdi, og bortfalder uden kompensation til indehaveren. |
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| E.4 | Interesseforhold | Emissionsbanken (og/eller forbundne virksomheder) har fra tid til anden ydet og vil fortsat yde investerings- og forretningsbanktjenester til Selskabet som led i dets almindelige erhvervsmæssige virksomhed og kan som led heri have modtaget sædvanlige gebyrer og kommissioner. Emissionsbanken modtager en kombination af et fast fee og en procentdel af bruttoprovenuet fra Udbuddet. Emissionsbanken har derfor en økonomisk interesse i udfaldet af Udbuddet. Endvidere kan Emissionsbanken, dens medarbejdere og enhver forbundet virksomhed, der optræder som investor, for egen regning tegne eller købe Udbudte aktier og andre værdipapirer i Selskaber eller foretage andre investeringer for egen regning og kan udbyde eller sælge sådanne værdipapirer (eller andre investeringer) på anden måde end i forbindelse med Udbuddet. Emissionsbanken påtænker ikke at oplyse omfanget af sådanne investeringer eller transaktioner i videre omfang, end det er pålagt ved lov eller regulatoriske forpligtigelser.

Visse af garantistillerne vil modtage en garantikommission på 5 % ved fortegningsemissionens gennemførelse.

Selskabet har ikke kendskab til andre personer eller gruppe af personer, der har særlig interesse i Udbuddet, herunder interesser, der strider mod Selskabets interesser i forbindelse med optagelsen til handel eller Udbuddet. |
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| E.5 | Sælgende aktionærer og Fastfrysningsaftaler. | Ikke relevant. Udbuddet består udelukkende af nye aktier udstedt af Selskabet og ingen aktionær vil være underlagt fastfrysningsaftaler. |
| E.6 | Udvanding | Selskabets eksisterende aktionærer, som ikke ønsker at deltage i den kommende fortegningsemission, forventes at blive udvandet med minimum og maksimalt 20.000.000, svarende til en udvanding i niveauet 44,2 %. |
| E.7 | Anslåede udgifter | Ikke relevant. Selskabet pålægger ikke investor nogle udgifter. |

ENGLISH SUMMARY

Summaries are made up of disclosure requirements known as 'Elements'. These elements are numbered in Sections A - E (A.1 - E.7).

This summary contains all the Elements required to be included in a summary for this type of securities and Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of securities and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of 'not applicable'.

Section A — Introduction and warnings
Element	Disclosure requirement	Comments
A.1	Warning	This summary should be read as introduction to the prospectus;
• any decision to invest in the securities should be based on consideration of the prospectus as a whole by the investor;
• where a claim relating to the information contained in the prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the prospectus before the legal proceedings are initiated; and
• civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus or it does not provide, when read together with the other parts of the prospectus, key information in order to aid investors when considering whether to invest in such securities
A.2.	Commitment to agents	Not applicable. No resale will take place. No financial intermediaries will be used for the final placement of the offer.
Section B — Issuer
Element	Disclosure requirement	Comments
B.1	Legal and commercial name	The legal and commercial name of the issuer is Hugo Games A/S.
B.2	Domicile and legal form, legislation and country of incorporation	Hugo Games A/S is a Danish public limited liability company governed by the Danish Companies Act.
The Company’s registered business address is Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark.

| B.3 | Current operations, principal activities and markets | Hugo Games A/S is a mobile games company established in 2011 developing interactive; cross-media entertainment content including games and animated series based on the Company’s intellectual property Hugo the troll.

The Company will continue to build up the character Hugo on the mobile gaming platform together with the other established IP’s and concepts. This will also include a number of celebrities, like the already signed agreement with Portuguese professional footballer Cristiano Ronaldo, the NFL player Cameron Newton and the skateboarder Nyjah Houston.

The new games will be casual mobile games in which Hugo, Cristiano Ronaldo, Cameron Newton and Nyjah Houston will appear in their own games, respectively, and include several social media features.

The Company operates within the global mobile games market. The free-to-play business model dominates the mobile games business and micro transactions within the game (ads and in-app purchases) are the key revenue drivers. Major markets that the Company is active on are the Apple Store and Google Play. |
| --- | --- | --- |
| B.4a | Significant recent trends | The market in which the Company operates is experiencing a significant growth which is reasonably likely to have a material effect on the Company or the industries in which it operates. The mobile game market is driven by strong growth in the number of smartphones in the world. |
| B.5 | Description of the Group | Hugo Games A/S is the parent company of Hugo Games Development ApS and Ivanoff Interactive A/S, both of which are 100% owned and controlled.

Hugo Games A/S acts as a holding company for the Hugo Group.

Hugo Games Development ApS is a Danish private limited liability company governed by the Danish Companies Act, registered with the Danish Business Authority under organization number CVR 3056 4235. All matters relating to the intellectual property rights of HUGO are organized through Hugo Games Development ApS.

Ivanoff Interactive A/S is a Danish public limited liability company governed by the Danish Companies Act, registered with the Danish Business Authority under organization number CVR 2420 7811. All employees are hired through this company and all development/production of the in-house developed games is organized through Ivanoff Interactive A/S. |
| B.6 | Interests in the Company and voting rights | Hugo Games’ shareholders do not have different voting rights.

Aula Holding ApS, owned by CEO Henrik Kølle, currently owns 47.8 % of the shares in Hugo Games. |

B.7 Selected historical key financial information

| Hugo Games A/S
Consolidated figures | | | |
| --- | --- | --- | --- |
| DKK 1000 | IFRS | IFRS | |
| Profit and loss summary | Audited
31.12.2015 | Audited
31.12.2014 | |
| Total revenues | 3,198 | 6,344 | |
| Profit | -33,909 | -4,711 | |
| Result before tax | -37,122 | -5,028 | |
| Result after tax | -29,431 | -3,629 | |
| | IFRS | IFRS | |
| Balance sheet summary | Audited
31.12.2015 | Audited
31.12.2014 | |
| Total Intangible assets | 41,574 | 35,498 | |
| Total tangible assets | 64 | 21 | |
| Total financial assets | 65 | 77 | |
| Total Prepayments | 2,047 | 2,129 | |
| Total receivables | 4,896 | 1,460 | |
| Cash and cash equivalents | 14,594 | 11,958 | |
| Total Assets | 63,240 | 51,143 | |
| Total equity | 52,055 | 36,874 | |
| Total Non-current liabilities | 5,256 | 10,355 | |
| Total current liabilities | 5,929 | 3,934 | |
| Total equity and liabilities | 63,240 | 51,163 | |
| Key figures | 31.12.2015 | 31.12.2014 | |
| Numbers of shares | 25,000,000 | 20,000,000 | |
| Dividends | 0.0 | 0.0 | |
| Debt ration (non current Liab/total Asstes) | 0.08 | 0.20 | |
| Earnings per share (year end number) | -1.18 | -0.18 | |
| There have not been any significant changes to the Group's financial or trading position subsequent to the end of 2015 | | | |
| Hugo Games A/S
Consolidated figures | | | |
| DKK 1000 | IFRS | IFRS | |
| Profit and loss summary | Review
Q1 2016 | Review
Q1 2015 | |
| Total revenues | 792 | 909 | |
| Profit | -6,014 | -3,958 | |
| Result before tax | -6,004 | -4,092 | |
| Result after tax | -4,716 | -3,492 | |
| | IFRS | IFRS | |
| Balance sheet summary | Review
31.03.2016 | Review
31.03.2015 | |
| Total Intangible assets | 43,872 | 39,225 | |
| Total tangible assets | 57 | 15 | |
| Total financial assets | 65 | 77 | |
| Total Prepayments | 1,691 | 2,283 | |
| Total receivables | 6,695 | 1,827 | |
| Cash and cash equivalents | 7,461 | 12,261 | |
| Total Assets | 59,841 | 55,688 | |
| Total equity | 48,289 | 39,131 | |
| Total Non-current liabilities | 4,590 | 9,402 | |
| Total current liabilities | 6,962 | 7,155 | |
| Total equity and liabilities | 59,841 | 55,688 | |
| Key figures | 31.03.2016 | 31.03.2015 | |
| Numbers of shares | 25,274,148 | 20,000,000 | |
| Dividends | 0.0 | 0.0 | |
| Debt ration (non current Liab/total Asstes) | 0.08 | 0.17 | |
| Earnings per share (year end number) | -0.19 | -0.17 | |
| There have not been any significant changes to the Group's financial or trading position subsequent to the end of 31.03.2016 | | | |

B.8	Selected key pro forma financial information	Not applicable as there has been no significant changes in the Company's assets, liabilities or earnings exists that would require pro forma financial information
B.9	Profit forecast or estimate	Hugo Games A/S released financial guidance for 2016 in its annual report for 2015 on certain key figures as set out below. These figures were reiterated in the Company's Q1 2016 report: Gross profit is expected to be in the range from DKK 20 million to DKK 25 million. EBITDA is expected to be in the range from DKK 3.0 million to DKK 7.0 million.
B.10	Audit report qualifications	Not applicable. The audit reports for the historical financial information were issued without qualifications.
B.11	Working capital	At the date of the Prospectus, based on the recent strategic expansion of the Company's portfolio, and related marketing activities, the Company does not have sufficient working capital for its present requirements for the next 12 months. The Company's best estimate is that its current working capital will finance the Company until the end of July 2016. At the date of the Prospectus, the Company has a cash balance of DKK 1.0 million. DKK 8 million in additional funding will be required to finance the Company's current and firm commitments estimated to DKK 30 million for the next 12 months from the date of the Prospectus, which includes financial commitments to expand and develop new games in the Company's gaming portfolio and expenses related to salary and administrative activities in the period. Accordingly, the Board of the Company has decided to complete a Rights Issue for funding of its expansion strategy. As the full amount in the Rights Issue is underwritten and combined with expected cash flow from operations, the opinion of the Board is that this combined amount will be sufficient to cover the Company's present requirements for at least the next 12 months.
Section C — Securities
Element	Disclosure requirement	Comments
C.1	Type and class of securities admitted to trading and identification number	The Company has one single class of shares. The Shares are registered in Verdipapirsentralen ASA, Norge (VPS) under the ISIN DK0060637999.
C.2	Currency issue	Norwegian Kroner (NOK).
C.3	Number of shares in issue and nominal value	The share capital of the Company as of the date of this Prospectus is nominal DKK 12,637,074 divided into 25,274,148 shares, each with a nominal value of DKK 0.50. The shares have been fully paid and issued.

| C.4 | Rights attaching to the securities | The Company has one single class of shares which carry equal rights in all respect including the right to dividend and each Share carries one vote in the Company's general meeting.

All shares carry equal rights to dividend. The right to dividend arises from the time of distribution of the shares to the investors.

All business transacted by the general meeting shall be decided by a simple majority of votes, unless otherwise provided by the Danish Companies Act (Da: selskabsloven) or by the Articles of Association.

Under Danish law, all shareholders of the Company will generally have preemptive rights if the general meeting of the Company resolves to increase the share capital by cash payment. However, the preemptive rights of the shareholders may be derogated from by a majority comprising at least two-thirds of the votes cast and of the share capital represented at the general meeting if the share capital increase is made at market price.

Redemption of individual shares requires the consent of the holders of the shares to be redeemed.

In the event of a dissolution or liquidation of the Company, the Company's shareholders are entitled to participate in the distribution of net assets in proportion to their nominal shareholdings after payment of the Company's creditors. |
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| C.5 | Restrictions on transfer | Not applicable. All shares are freely transferable. |
| C.6 | Admission to trading | The Company's Shares are listed on Oslo Axess under the ticker code HUGO. The Offer Shares issued in the Rights Issue will be listed. |
| C.7 | Dividend policy | Not applicable. The Company does not believe that it will pay any dividends to shareholders in the foreseeable future. Any payment of dividends will be at the discretion of the Board of Directors and the majority at any general meeting and will depend on the Company's financial condition, capital and legal requirements, earnings and other factors. |

Section D — Risks
Element	Disclosure requirement	Comments
D.1	Key risks specific to the Company or its industry	The following risks are specific to the issuer or its industry:

Operational risks:
• Limited operating history
• Competition
• Attraction and retention of key personnel
• Disputes
• Loss of reputation
• Changes in current tax regulations
• Collaborations and licensing arrangements
• Intellectual property rights

Financial risks
• Operating losses
• Ability to raise additional capital
• Macroeconomic fluctuations
• Changes in interest rates
• Currency rate fluctuations
• Hugo Games is dependent on successful development of its product candidates and is exposed to release delays

Market risk
• Highly competitive markets
• Brand awareness and recognition
• End user tastes
• Inferior virtual deck placement
• Technology
• Revenue streams

Other risks
• Trade barriers
• Political events
• Termination of partner contracts |

D.3	Key risks specific to the securities	The following risk factors are specific to the securities:
		• Price volatility of publicly traded securities
• Future sales of Shares
• Limited free float of the Shares
• Potential dilution of shareholders
• The ability to bring an action against the Company may be limited under Norwegian law
• The Company does not intend to pay dividends for the foreseeable future
• Shareholders outside of Norway are subject to exchange rate risk due to NOK being the Offering and trading currency of the Shares
• Shareholders outside of Denmark are subject to exchange rate risk due to the Company paying its potential future dividends in DKK
		The following risk factors are specific to the Rights Issue:
• The Company will have broad discretion over the use of the net proceeds
• The interests of the Company’s major shareholders could be different from those of other investors or the Company
• Pre-emptive rights may not be available to U.S. or other shareholders
• Existing shareholders who do not participate in the Rights Issue may experience significant dilution in their shareholding
• An active trading market in Subscription Rights may not develop on Oslo Stock Exchange and/or the market value of the Subscription Rights may fluctuate
• If the Rights Issue is withdrawn or for any reason not carried out, the Subscription Rights will no longer be of value

Section E — Offer
Element	Disclosure requirement	Comments
E.1	Net proceeds and estimated expenses	Gross proceeds to the Company in the Rights Issue will be NOK 30 million. The minimum transaction costs related to the Rights Issue are expected to be approximately NOK 5.3 million.
The Company will cover transaction costs and all other directly attributable costs in connection with the Rights Issue.
After deduction of transaction costs, the total net proceeds to the Company from the Rights Issue will be approximately NOK 24.7 million.
E.2a	Reasons for the Offering and use of proceeds	In order to secure sufficient capital for the execution of the Group’s 3-fold strategy, including, but not limited to, its operations and further expansion of its portfolio and marketing activities as well as its organization, the Company is completing the Rights Issue.
The net proceeds of minimum NOK 25 million from the Offering and cash flow from operational activities will primarily be used to fund marketing and further the development of the Company’s game portfolio.
E.3	Terms and conditions of the Offering	The Rights Issue consists of an offer by the Company to issue 20,000,000 Offer Shares at a Subscription Price of NOK 1.50 per Offer Share, raising NOK 30 million.
Existing Shareholders will be granted tradable Subscription Rights that, subject to applicable law, provide preferential right to subscribe for and be allocated Offer Shares in the Rights Issue. Oversubscription and subscription without Subscription Rights will be permitted; however, there can be no assurance that Offer Shares will be allocated for such subscriptions.
In connection with the Rights Issue, the Company has entered into underwriting agreements with participants in an underwriting syndicate consisting. The total underwriting obligation of the underwriting syndicate corresponds to the amount of the Rights Issue NOK 30 million.

| E.3 | Terms and conditions of the Rights Issue | The Subscription Period will commence on 27 June 2016 at 09:00 hours CEST and end on 11 July 2016 at 16:30 hours (CEST). Shareholders who are registered in the Company’s shareholder register in the VPS as of the Record Date (24 June 2016) will receive Subscription Rights. Provided that the delivery of traded Shares was made with ordinary T+2 settlement in the VPS, Shares that were acquired on or before 22 June 2016 will give the right to receive Subscription Rights, whereas Shares that were acquired from and including 23 June 2016 will not give the right to receive Subscription Rights.

The Subscription Rights will be fully tradable and listed on the Oslo Stock Exchange with ticker code “HUGO T” from 09:00 hours (CEST) on 27 June 2016 until 16:30 hours (CEST) on 7 July 2016. Subscription rights that are not used to subscribe for offer shares before the expiry of the subscription period, or that are not sold before 7 July 2016 at 16:30 hours (CEST), will have no value and will lapse without compensation to the holder. |
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| E.4 | Material and conflicting interest | The Manager (and/or its affiliates) has provided from time to time, and may provide in the future, investment and commercial banking services to the Company during its ordinary course of business, for which it may have received and may continue to receive customary fees and commissions. The Manager will be paid a combination of a fixed fee and a percentage of the gross proceeds raised in the Rights Issue. The Manager therefore has an economic interest in a successful outcome of the Rights Issue. Further the Manager, its employees and any affiliate acting as an investor for their own account, may subscribe or purchase Offer Shares and other Securities of the Company or other investments for their own account and may offer or sell such securities (or other investments) otherwise than in connection with the Offering. The Manager does not intend to disclose the extent of any such investments or transactions other than in accordance with any legal or regularity obligation to do so.

Some of the Underwriters will upon completion of the Rights Issue receive an underwriting fee of 5%.

The Company is not aware of any other person, or group of persons, that has a special interest in the Offering, including interest conflicting with the interests of the Company that relates to the Listing or Offering. |
| E.5 | Selling shareholders and lock-up agreements | Not applicable. All Offer Shares will be newly issued shares and no subscriber will be subject to lock-up agreements. |
| E.6 | Dilution resulting from the Offering | Existing shareholders who do not participate in the Rights Issue will be diluted with minimum and maximum 20,000,000 shares, corresponding to approximately 44.2%. |

E.7	Estimated expenses charged to investor	Not applicable. No expenses will be charged to the investor by the Company.

Hugo Games A/S SHARE SECURITIES NOTE

1. RISK FACTORS

Investing in the Company involves inherent risks. This section contains an overview of the material risk factors known to the Company at the date of this Prospectus relating to the Company, the industry in which it operates and the Shares of the Company. The order in which risk factors are mentioned is not intended as an indication of the probability or importance of the risk factors.

If any of the following risks actually occur, the Company’s business, financial position and operating results could be materially and adversely affected as well as materially and adversely affecting the price of the Shares.

A prospective investor should consider carefully the risk factors set forth below before making an investment decision, and should consult his or her own expert advisors as to the suitability of an investment in the Shares of the Company.

An investment in the Shares is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of the investment.

1.1 Risk factors relating to the Company - Operational risks

Limited operating history

Hugo Games was incorporated in April 2011 and the Hugo brand was also acquired by Hugo Games Development ApS in 2011. The first game based on the character HUGO was released in 2011. Accordingly, the Company has only a limited history of generating revenues, and the future revenue potential of their business in this emerging market is uncertain. As a result of the Company’s short operating history, there are limited financial data that can be used to evaluate their business. Any evaluation of the business and the prospects must be considered in light of the Company’s limited operating history and the risks and uncertainties encountered by companies in their stage of development. As an early stage company in the emerging mobile entertainment industry, they face increased risks, uncertainties, expenses and difficulties, which could have a material adverse effect on Hugo Games’ business, financial condition and results of operations.

Competition

The market for Hugo Games’ games is despite trademark protection exposed to competitors, which in many cases are major mobile gaming companies. The competitors may develop more popular games and achieve better virtual deck placement and attention from the wireless carriers. These competing games may render Hugo Games’ products obsolete or limit the ability for Hugo Games to generate revenue from their products.

Attraction and retention of key personnel

Due to the size and structure of the Company, the Company is very dependent on its management and employees, for instance the Company’s CEO Henrik Kølle. Competition for qualified employees among companies in the mobile game industry is intense. Hugo Game’s future success depends upon its ability to attract, retain and motivate highly skilled employees. Not being able to successfully attract and retain qualified personnel, consultants and advisors may impede the achievement of the Company’s objectives and have a material adverse effect on Hugo Games’ business, financial condition and results of operations.

Disputes

The Company may from time to time be involved in disputes, including disputes regarding its intellectual property rights, with all ensuing risks and costs, which could have a material adverse effect on Hugo Game’s business, financial condition and results of operations.

Loss of reputation

Any negative publicity related to the Company or its partners could adversely affect its reputation and the value of its brand. The Company is exposed, among others, to the risk that litigation, consultants, employee or officer’s misconduct, operational failures, disclosure of confidential information, negative publicity, whether or not founded

could damage its reputation. Any erosion of the Company's reputation may have a material adverse effect on its business, revenues, and results of operations or financial conditions.

Changes in current tax regulations

The Company's operations are subject to applicable taxes and charges. No assurance can be made that the current tax systems and charges will sustain and that the government will not adopt different policies with respect to taxation and charges. Such change may have a material adverse negative effect on the Company's financial position and results of operations.

Collaborations and licensing arrangements

Hugo Games is substantially dependent on entering into collaborations and licensing arrangements with third parties in the development and commercialization of certain of its product candidates. If third party developers terminate their collaboration with Hugo Games, or is not able to deliver, or negotiate agreements with terms favorable to Hugo Games, the Company may have to reduce the number of games it intends to introduce, delay introduction or increase internal development staff. This would be time-consuming and potentially costly, and, as a result this could have a material adverse effect on the Company's business, operating results and financial condition.

Termination of partner contracts

The Company is exposed to the risk that a contract with a business partners will be terminated due to failures to find the right gaming universe and/or expression of a certain person or character, failure from other game designs to fulfill the requirements from the partners, publishers, etc., or other circumstances which leads to the termination of the partnership, and such termination could have a material adverse effect on the Company's business, operating results and financial condition.

Intellectual property rights (IPR)

The market for Hugo Games' games are protected by intellectual property rights (IPR). However, there may be substantial costs associated with the protection or enforcement of the Company's intellectual property rights, and the Company may be unable to protect or enforce its intellectual property rights. Litigation may prevent the Company from selling the products over a substantial period of time. The Company may not be able to achieve freedom to operate in markets that are important to the Company's success. In cases where products have been out-licensed, the Company may experience setbacks if licensing partners are unable to protect or enforce the intellectual property rights.

Infringement of the Company's intellectual property rights can be costly for Hugo Games either directly (infringement process) or indirectly (loss of sales). A claim of infringement against Hugo Games could injure the Company's reputation and materially adversely affect the ability to sell and develop products and technology.

Third parties may claim that the Company's current or future products infringe their proprietary rights, and these claims, whether they have merit or not, could materially adversely affect the business by increasing costs or reducing Hugo Games' revenue. If the Company infringes third party proprietary rights, such infringement may cease the production and/or development of the products and/or technology infringing third parties. Any cease of production and/or development of the products and/or technology could have a material adverse effect on Hugo Game's business, financial condition and results of operations.

1.2 Risk factors relating to the Company - Financial risks

Operating losses

Hugo Games has since its incorporation until 31 March 2016 accumulated losses of approximately DKK 37.8 million. The Company plans to obtain revenues and a profitable business in the future. However, there is no assurance as to when and if Hugo Games will achieve revenues and profitability.

Ability to raise additional capital

In order to successfully execute the outlined strategies, and to flexibly and effectively react to new opportunities and threats arising, the Company may seek to raise additional capital through equity issues, debt financing, collaborative arrangements, strategic alliances or from other sources. However, the Company may prove unable

to raise such additional capital on commercially acceptable terms, if at all. If the Company is unable to generate adequate funds from operations or from additional sources, the business, results of operations and financial condition may be materially and adversely affected, in worst case bankruptcy. Moreover, the Company's ability to obtain such additional capital may be materially adversely affected by the general economic conditions at that particular point in time.

Macroeconomic fluctuations

Hugo Games is exposed to the economic cycle, since changes in the general economic situation could materially adversely affect future demand for the Company's products.

Changes in interest rates

Hugo Games may, in the future, require debt financing. In this event the profitability may be materially adversely affected during any period of unexpected or rapid increase in interest rates.

Currency rate fluctuations

The Company plans to generate revenues from a range of foreign countries and to purchase goods and services in foreign currencies. The Company's base currency is Danske Kroner (DKK), however revenues from mobile gamers originate from many different currencies, depending on which country the game is bought by the end-user. Virtual deck placement holders such as Google Play and App Store internally converts all revenues to DKK and pay the net proceeds to the Company in DKK. Revenue and costs from advertising activity from online advertising agency holders typically occurs in USD, while a significant portion of development- and updating activity takes place in England with GBP as currency. Fluctuations in currency rates towards the DKK can substantially affect the revenues and costs of the Company in the future. As a main rule of the Company's currency policy, the Company does not hedge its foreign exchange exposure, but in the future the Company may choose to enter into arrangements such as forward currency contracts in order to hedge larger single items that affect cash flows.

Development

Hugo Games is at an early stage of development and depends on the successful further development and updating of its product candidates, which are subject to uncertainties beyond its control; there is no guarantee that Hugo Games ever will generate substantial revenue. Furthermore, the Company's product pipeline is very dynamic where changes must be foreseen. The dynamic is a function of allocation of resources, feedback from users when products are in soft-launch, changed prioritization due to new contracts, change of cash-position etc., which all together or by itself can delay the otherwise communicated release for a product.

1.3 Risk factors relating to the Company - Market risks

The market for Hugo Games' products is expected to grow. However, should the demand slow this may hamper the future profitability of the Company. Further, Hugo Games is a relatively young and small company and there is risks connected to building a sustainable organization capable of adapting to the changing markets and the growing business of Hugo Games.

Highly competitive markets

The development, distribution and sale of mobile games is a highly competitive business. For end-users, the competition is primarily based on brand, game quality and price. The competition for virtual deck placement is based on these factors, as well as historical performance and perception of sales potential and relationships with licensors of brands and other intellectual property. For content and brand licensors, the competition is based on royalty and other economic terms, perceptions of development quality, porting abilities, speed of execution, distribution breadth and relationships with carriers. The Company also compete for experienced and talented employees and such competition may have material adverse effect on Hugo Game's business, financial condition and results of operations.

In the future, likely competitors include major media companies, traditional video game publishers, content aggregators, mobile software providers and independent mobile game publishers. Cell phone carriers may also decide to develop, internally or through a managed third-party developer, and distribute their own mobile games. If carriers enter the mobile game market as publishers, they might refuse to distribute some or all of the games

produced by third parties, or might deny them access to all or part of their networks, which may have material adverse effect on Hugo Game’s business, financial condition and results of operations.

Brand awareness and recognition

Establishing and maintaining the brand is critical to retain and expand the Company’s existing relationship with for instance Google Play, App Store and content licensors, as well as developing new relationships. In addition, Hugo Games’ ability to maintain and uphold the contracts with parties such as Google Play and App Store is critical to the business of the Company. Promotion of the Hugo brand will depend on the Company’s success in providing high-quality mobile games. Similarly, recognition of the Company’s games by end-users will depend on their ability to develop engaging games of high quality with attractive titles. However, Hugo Games’ success will also depend, in part, on the services and efforts of third parties, over which the Company have little or no control. For instance, if mobile carriers fail to provide high levels of service, their end-users’ ability to access their games may be interrupted, which may materially adversely affect Hugo’s brand.

End-users’ tastes

Hugo Games’ business depends on developing and publishing mobile games. In order to enhance their offering of games and to introduce new games the Company must continue to invest in licensing efforts, research and development, marketing and regional expansion. End-user preferences, competing games and other entertainment activities are unpredictable factors that affect the Company’s business, operating results and financial condition. A subsequent shift in the entertainment preferences of end-users could cause a decline in the Company’s games’ popularity that could materially reduce their revenues and have a material adverse effect on Hugo Games’ business, operating results and financial condition.

Inferior virtual deck placement

Virtual deck placement holders such as Google Play and App Store provide a limited selection of games that are accessible through a deck on mobile handsets and typically one or more top level menus highlighting games that are recent top sellers or which is believed to become a top seller or which is featured for any other reason. The Company believes that deck placement on the top level or featured menu or toward the top of genre specific or other menus, rather than lower down or in sub-menus, is likely to result in games achieving a greater degree of commercial success, and consequently inferior virtual deck placement may have a material adverse effect on Hugo Game’s business, financial condition and results of operations.

Technology

Hugo Games’ business model is based on app distribution of mobile games. The future may bring new technologies, which would cause a shift in end-user behaviour and thereby materially adversely affect the Company’s business. As a technology company, Hugo Games is further subject to risks related to technology theft and similar crimes that could materially adversely affect the operations of the Company.

Revenue streams

Hugo Games’ business model is based on revenue from in-app purchases and in-app advertising. Future changes in end-user behaviours, technology, pricing or legislation may materially and adversely affect such revenue streams and thereby the business of the Company.

1.4 Risk factors relating to the Company - Other risks

Trade barriers

Trade barriers (monetary and other) could have a material adverse effect on the Company’s business, results of operations and financial condition.

Political Events

Political events could change the business climate and regulation in a way that may have a material adverse effect on the value of the Company’s operations.

1.5 Risk factors material to the securities

The market value of the Shares and Subscription Rights could experience substantial fluctuations caused by a number of factors, which could have a material adverse effect on Hugo Games’ business, financial condition and results of operations. Many of these will be outside the Company’s control and may be independent of its operational and financial development.

Price volatility of publicly traded securities

In recent years, the securities markets in Norway and elsewhere in Europe, have experienced a high level of price and volume volatility, and the market price of securities of many companies have experienced wide fluctuations in price. This is not necessarily related to the operating performance, underlying asset values or future prospects of such companies. There can be no assurance that continual fluctuations in price will not occur in the future and thereby have a material adverse effect on Hugo Game’s business, financial condition and results of operations. It is likely that the quoted market price for the Shares will be subject to market trends generally, notwithstanding the financial and operational performance of the Company.

Future sales of Shares

Sales of substantial amounts of the Shares or the perception that such sales could occur, could have a material adverse effect on the market value of the Shares and the Company’s ability to raise capital through future capital increases.

Limited free float of the Shares

At the time of this prospectus approximately 53.6 % of the Share Capital of the Company is held by the Company’s top 3 shareholders. This may limit the share’s free float and such limited free float may have a material adverse effect on the liquidity of the Shares and result in a low trading volume of the Shares, which could have a material adverse effect on the then prevailing market price for the Shares.

Potential dilution of shareholders

The Company may require additional capital in the future. This could be necessary to execute the outlined strategies, and to flexibly and effectively react to new opportunities and threats arising, as well as to cater for unanticipated liabilities or expenses that may be incurred. If the Company raises capital through issues of new Shares or other equity instruments in the future, such issuances may result in dilution of ownership and/or value for the then existing shareholders of the Company depending on the structure and conditions of such issuances.

Nominee accounts and voting rights

Beneficial owners of the Shares that are registered in a nominee account (e.g., through brokers, dealers or other third parties) may not be able to vote for such Shares unless their ownership is re-registered in their names with the VPS prior to the Company’s general meetings. The Company cannot guarantee that beneficial owners of the Shares will receive the notice for a general meeting in time to instruct their nominees to effect a re-registration of their Shares or otherwise arrange for votes to be cast for such Shares.

The ability to bring an action against the Company may be limited under Danish law

The rights of holders of the Shares are governed by Danish law and by the Articles of Association. These rights may differ from the rights of shareholders in other jurisdictions. In addition, it may be difficult to prevail in a claim against the Company under, or to enforce liabilities predicated upon, securities laws in jurisdictions other than Denmark.

The Company does not intend to pay dividends for the foreseeable future, and investors in this Offering may be forced to sell their Shares in order to realize a return on their investment

The Company does not believe that it will pay any dividends to shareholders in the foreseeable future. Any payment of dividends will be at the discretion of the Board of Directors and the majority at any general meeting and will depend on the Company’s financial condition, capital and legal requirements, earnings and other factors.

The Company’s ability to pay dividends might also be restricted by the terms of any indebtedness of the Group. Consequently, investors of the Offer Shares should not rely on dividends in order to receive a return on their investment.

Shareholders outside of Norway are subject to exchange rate risk

The Shares are priced in NOK both in the Offering and in future trading. Accordingly, any investor outside Norway is subject to adverse movements in NOK against its local currency, as the foreign currency equivalent of any price received in connection with any sale of the Shares could be materially adversely affected.

Shareholders outside of Denmark are subject to exchange rate risk

The Company is incorporated in Denmark and will prepare its annual accounts in DKK. Therefore, any future payments of dividends on the Shares will be denominated in DKK. Accordingly, any investor outside Denmark is subject to adverse movements in DKK against its local currency, as the foreign currency equivalent of any dividends paid on the Shares could be materially adversely affected.

1.6 Risk factors material to the Rights Issue

The Company will have broad discretion over the use of the net proceeds from this Offering and may not use them effectively

The Company intends to use the net proceeds from this Offering as described in Section 3.4. However, the Company will have broad discretion over the use of net proceeds received from this Offering, and such proceeds may not be used as currently planned and may not be used effectively. A failure to apply the net proceeds from this Offering effectively or as currently planned could have a material adverse effect on the Company’s business, prospects, financial position and results of operations.

The interests of the Company’s major shareholders could be different from those of other investors or the Company

As of the date of this Prospectus, the aggregate ownership of the shareholders holding more than 5% of the total share capital of the Company is approximately 53.4%. The Company’s biggest shareholder, Aula Holding ApS, holds approximately 47.8% of the total share capital at the time of this Prospectus.

The Company is not aware of any shareholders’ agreement or other agreements between its shareholders to act in concert that will be in effect following the completion of the Rights Issue. However, if the major shareholders were to retain a majority of the voting rights at any future general meeting, they would e.g. have the ability to elect or dismiss directors and either pass or, as the case may be, block shareholders’ resolutions on significant corporate matters.

The Company’s major shareholders may have interests that differ from other shareholders’ and the Company’s interests, and may exercise their influence in a way which may be adverse to the interests of the Company or its other shareholders. This concentration of ownership may have a material adverse effect on the market price of the Shares.

Pre-emptive rights may not be available to U.S. or other shareholders

Under Danish law, existing shareholders will have pre-emptive rights to participate on the basis of their existing share ownership in the issuance of any new shares for cash consideration, unless those rights are disapplied by a resolution of the shareholders at a general meeting or the shares are issued on the basis of an authorization to the board of directors under which the board may waive the pre-emptive rights. Shareholders in the United States, however, may be unable to exercise any such rights to subscribe for new shares unless a registration statement under the U.S. Securities Act is in effect in respect of such rights and shares or an exemption from the registration requirements under the U.S. Securities Act is available. Shareholders in other jurisdictions outside Denmark may be similarly affected if the rights and the new shares being offered have not been registered with, or approved by, the relevant authorities in such jurisdiction. The Company is under no obligation to file a registration statement under the U.S. Securities Act or seek similar approvals under the laws of any other jurisdiction outside Denmark

in respect of any such rights and shares. To the extent that the Company’s shareholders are not able to exercise their rights to subscribe for new shares, their proportional interests in the Company will be reduced and they may be financially diluted.

Existing Shareholders who do not participate in the Rights Issue may experience significant dilution in their shareholding

Subscription Rights that are not traded or exercised by the end of the Subscription Period will have no value and will automatically lapse without compensation to the holder. To the extent that an Existing Shareholder does not exercise its Subscription Rights prior to the expiry of the Subscription Period, whether by choice or due to a failure to comply with procedures set forth in Section 5 “Terms and Conditions of the Rights Issue”, or to the extent that an Existing Shareholder is not permitted to subscribe for Offer Shares as further described in Section 4.7 “Restrictions on the free transferability of Shares”, such Existing Shareholder’s proportionate ownership and voting interests in the Group after the completion of the Rights Issue will be diluted. Even if an Existing Shareholder elects to sell its unexercised Subscription Rights, or such Subscription Rights are sold on its behalf, the consideration it receives on the trading market for the Subscription Rights may not reflect the immediate dilution in its shareholding as a result of the completion of the Rights Issue.

An active trading market in Subscription Rights may not develop on the Oslo Stock Exchange and/or the market value of the Subscription Rights may fluctuate

An active trading market in the Subscription Rights may not develop on the Oslo Stock Exchange. In addition, because the trading price of the Subscription Rights depends on the trading price of the Shares, the price of the Subscription Rights may be volatile and subject to the same risks as described for the Shares elsewhere in this Prospectus. The existing volatility of the Shares may also have an effect on the volatility of the Subscription Rights.

The sale of Subscription Rights by or on behalf of Existing Shareholders may result in a reduction in the market price of the Subscription Rights and the Shares and increased volatility in the Shares.

Certain Existing Shareholders may be unable to take up and exercise their Subscription Rights as a matter of applicable law. The Subscription Rights of such Existing Shareholders, with the exception of Subscription Rights held through financial intermediaries, may be sold on their behalf in the market by the Manager pursuant to instructions from the Group, as further described in Section 5.6 “Subscription Rights”, but no assurance can be given as to whether such sales may actually take place or as to the price that may be achieved. Other holders of Subscription Rights may also choose not to exercise their Subscription Rights and therefore sell them in the market.

The sale of Subscription Rights by or on behalf of holders of such rights could cause significant downward pressure on, and may result in a substantial reduction in, the price of the Subscription Rights and the Shares.

If the Rights Issue is withdrawn or for any reason not carried out, the Subscription Rights will no longer be of value

If the Rights Issue is withdrawn or not carried out, all Subscription Rights will lapse without value, and subscriptions for, and allocations of, Offer Shares that have been made will be disregarded and any subscription payments made will be returned without interest or any other compensation. The lapsing of Subscription Rights would be without prejudice to the validity of any trades in Subscription Rights, and investors would not receive any refund or compensation with respect to Subscription Rights purchased in the market.

2. RESPONSIBILITY STATEMENT

2.1 Persons responsible for the Prospectus

The members of the Board of Directors hereby confirm that, after having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of our knowledge, in accordance with the facts and contains no omissions likely to affect its import.

22 June 2016

The Board of Directors of Hugo Games A/S

Bertel David Maigaard
(Head of Corporate Finance, Info Revision)
Chairman of Hugo Games A/S

Caspar Rose
(Professor, Copenhagen Business School)
Vice-Chairman of Hugo Games A/S

Rasmus Lund
(Partner at DELACOUR Law Firm)
Board member of Hugo Games A/S

Christian Sand Kirk
(Head of Private Banking, Greater Copenhagen Area, Sydbank A/S)
Board member of Hugo Games A/S

The Executive Management of Hugo Games A/S

Henrik Kølle
Chief Executive Officer of Hugo Games A/S

Peter Ekman
Chief Financial Officer of Hugo Games A/S

3. KEY INFORMATION

3.1 Working capital statement

The Company currently has a limited amount of income from operations and due to the nature of the business the Company is operating in with development and commercial launch risk for new and existing games, there is uncertainty as to when the revenues generated will be at a significantly higher level.

At the date of the Prospectus, based on the recent strategic expansion of the Company’s portfolio, and related marketing activities, the Company does not have sufficient working capital for its present requirements for the next 12 months. The Company’s best estimate is that its current working capital will finance the Company until the end of July 2016.

At the date of the Prospectus, the Company has a cash balance of DKK 1.0 million. DKK 8 million in additional funding will be required to finance the Company’s current and firm commitments estimated to DKK 30 million for the next 12 months from the date of the Prospectus, which includes financial commitments to expand and develop new games in the Company’s gaming portfolio and expenses related to salary and administrative activities in the period.

Accordingly, the Board of the Company has decided to complete a Rights Issue for funding of its expansion strategy. As the full amount in the Rights Issue is underwritten and combined with expected cash flow from operations, the opinion of the Board is that this combined amount will be sufficient to cover the Company’s present requirements for at least the next 12 months.

For details on the use of proceeds of the Company, please refer to section 3.4.

3.2 Capitalization and indebtedness

The table below lists the Group’s current capitalization and indebtedness.

Hoge Games A/S - Consolidated figures	31.03.2018	Changes since end-Q1**	Date of Prospectus	Hoge Games A/S - Consolidated figures	31.03.2018	Changes since end-Q1**	Date of Prospectus
DKK 1000				DKK 1000
CAPITALISATION				INDERTEDNESS
Total current debt				(A) Cash	7,461	-6,461	1200
Guaranteed				(B) Cash equivalents	-	-	-
Secured*	1867	-	1867	(C) Trading securities	-	-	-
*Shareholder loan		2,000	2,000	(D) Total liquidity (A + B + C)	7,461	-6,461	1,000
Unguaranteed / unsecured	5,095	-	5,095
Total Current debt	6,962	2,000	8,962	(E) Current financial receivables	-	-	-
				(F) Current bank debt	-	-	-
Total non-current debt				(G) Current portion of non-current debt	1867	-	1867
Guaranteed				(H) Other current financial debt	5,095	2,000	7,095
Secured*	4,586	-463	4,103	(I) Current financial debt (F + G + H)	6,962	2,000	8,962
Unguaranteed / unsecured	4	4	8
Total non-current debt	4,590	-459	4,151
				(J) Net current financial indebtedness (I - G - D)	-499	8,461	7,962
Total debt (a)	11,552	1,541	15,093

Shareholder's equity
Share Capital	12,637	-	12,637	(K) Non-current bank loans	-	-	-
Legal reserve				(L) Bonds Issued	-	-	-
Other reserves	35,652	-3,550	30,152	(M) Other non-current loans	4,590	-459	4,151
Total shareholder's equity (b)	48,289	-5,560	42,769	(N) Non-current financial indebtedness (K + L + M)	4,590	-459	4,151

Total Capitalisation (a+b)	59,841	-3,959	55,882	(O) Net financial indebtedness (J + N)	4,091	8,002	12,093

The secured debt totalling DKK 6,5 million is debt to Vækstfonden. As security for the loan a collateral of DKK 7,5 million has been agreed on intangible and tangible assets as well as receivables with a total book value of DKK 604 as of 31.3.2016. DKK 6.5 million of the secured debt is also guaranteed by the Company's largest shareholder Aula Holding ApS [100 controlled by CEO Henrik Kølle]. *Changes have not been audited or reviewed.

**Aula Holding ApS has provided a credit facility of DKK 4 million available to the company until the proceeds from the offering are paid. Of this credit facility DKK 2 million are drawn per date of the prospectus.

There have not been any significant changes to the Group's financial or trading position subsequent to the end of Q1 2016, except for the reduction in cash of DKK 6.5 million and shareholder loan DKK 2.0 million related to development of games and up-front payments related to recently signed strategic agreements, the down-payment of DKK 0.5 million in secured debt and the reduction of other reserves of DKK 5.5 million.

3.3 Interest of natural and legal persons involved in the Rights Issue

The Manager (and/or its affiliates) has provided from time to time, and may provide in the future, investment and commercial banking services to the Company during its ordinary course of business, for which it may have received and may continue to receive customary fees and commissions. The Manager will be paid a combination of a fixed fee and a percentage of the gross proceeds raised in the Rights Issue (see section 8 in the Share Securities Note regarding the Company's expected total expenses). The Manager therefore has an economic interest in a successful outcome of the Rights Issue. Further the Manager, its employees and any affiliate acting as an investor for their own account, may subscribe or purchase Offer Shares and other Securities of the Company or other investments for their own account and may offer or sell such securities (or other investments) otherwise than in connection with the Rights Issue. The Manager does not intend to disclose the extent of any such investments or transactions other than in accordance with any legal or regularity obligation to do so.

Some of the Underwriters will upon completion of the Rights Issue receive an underwriting fee as set out in section 5.11.

The Company is not aware of any other person, or group of persons, that has a special interest in the Rights Issue, including interest conflicting with the interests of the Company that relates to the Rights Issue.

3.4 Reasons for completion of the Rights Issue

In order to secure sufficient capital for the execution of the Group’s 3-fold strategy, including, but not limited to, its operations and further expansion of its portfolio and marketing activities as well as its organization, the Company is completing the Rights Issue.

The net proceeds from the Rights Issue and cash flow from operational activities will primarily be used to more aggressively fund marketing and development of the game portfolio of the Company.

4. INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING

4.1 Description of the type and the class of the Shares

The Company has one single class of shares which carry equal rights in all respect including the right to dividend and each Share carries one vote in the Company's general meeting.

The Offer Shares will confer shareholder rights, including the right to dividend, from such time as the share capital is registered in the Danish Register of Business Enterprises and rank pari passu in all respect with the existing Shares.

4.2 Legislation

The Company is a Danish public limited liability company governed inter alia by the Danish Companies Act and the Danish Securities Trading Act, including with regard to disclosure of inside information and ongoing disclosure requirements, market abuse, mandatory take-overs, squeeze-out, etc. However, the Company is also subject to certain aspects of Norwegian law, including inter alia the Norwegian Securities Trading Act.

The shares have been created under Danish legislation.

This section 4 includes certain aspects of Danish and Norwegian legislation relating to shareholding in a Danish public limited company, with its shares listed on Oslo Axess, but is however not a full or complete description of the matters described herein. The following summary does not purport to be a comprehensive description of all the legal considerations that may be relevant to a decision to purchase, own or dispose of Shares. Investors are advised to consult their own legal advisors concerning the overall legal consequences of their ownership of Shares.

4.3 Registration of Shares, proof of ownership

The Shares are registered in book-entry form under ISIN DK0060637999 in the Norwegian Central Securities Depository (VPS). The currency of the securities issue is Norwegian Kroner (NOK).

The Company’s registrar and paying agent is Nordea Bank Norge ASA, P.O. Box 1166 Sentrum, NO-0107 Oslo.

4.4 Rights attached to the Shares

Dividend rights

The general meeting must decide how to distribute, by dividend, the amount available for distribution as recorded in the financial statements. The general meeting cannot decide to distribute dividends of a higher amount than that proposed or accepted by the Company’s Board of Directors.

Dividends (including dividends to non-resident holders) may only be distributed out of distributable reserves, which are amounts stated as retained earnings in the Company’s latest adopted financial statements, and reserves that are distributable under statute or the Company’s articles of association, less retained losses.

The Company has only one class of shares. All shares carry equal rights to dividend. The right to dividend arises from the time of registration of the share capital increase with the Danish Register of Business Enterprises, which will be on or about 22 July 2016.

The Company does not currently intend to pay any dividends to shareholders in the near future. Any payment of dividends will be at the discretion of the Board of Directors and the majority at any general meeting and will depend on the Company’s financial condition, capital and legal requirements, earnings and other factors. There can be no assurance that in any given year a dividend will be proposed or declared.

The Company’s Articles of Association does not contain any provisions regarding time limit after which entitlement to dividend lapses, and neither do they contain any conversion provisions.

The Company’s dividends, if declared, are distributed by transfer to the accounts designated by the shareholders in accordance with the rules of VPS in force from time to time. Entitlement to unclaimed dividends which cannot be distributed to any such designated account will lapse in accordance with applicable Danish law, which at the date of this Prospectus generally prescribes a limitation period of three years. Any lapsed and unclaimed dividends will go to the Company.

Resolutions to reduce shareholder rights to receive dividends or distribution of the Company’s assets, including subscriptions for shares at a favourable price, to the benefit of parties other than the shareholders and the employees of the Company must be passed by at least nine-tenths of the votes cast as well as at least nine-tenths of the share capital represented at the general meeting. However, if a new class of preferred shares are established as part of a capital increase in favour of a third party, the decision can be passed by at least two-thirds of the votes cast as well as at least two-thirds of the share capital represented at the general meeting.

Voting rights

The Company has only one class of shares. Each Share in the Company carries one vote in the Company’s general meeting.

A resolution to amend the Articles of Association requires that the resolution be adopted by at least two-thirds of the votes cast as well as the share capital represented at the general meeting, unless the Danish Companies Act requires a larger majority.

The provisions in the Company’s Articles of Association relating to a change in the rights of a shareholder or a change to the capital are not more stringent than required by the Danish Companies Act.

Pre-emptive rights

The exercise of preemptive rights may be restricted for shareholders resident in certain jurisdictions, including but not limited to the United States, Canada, Japan and Australia, unless the Company decides to comply with applicable local requirements.

Rights of redemption and repurchase of shares

The Company has not issued redeemable shares (i.e. shares redeemable without the shareholder’s consent). The Company’s share capital may be reduced by reducing the par value of the shares. A resolution to decrease the Company’s share capital must be passed by at least two-thirds of the votes cast as well as at least two-thirds of the share capital represented at the general meeting. Redemption of individual shares requires the consent of the holders of the shares to be redeemed.

If a Danish limited liability company purchases its own shares for consideration, such consideration may only consist of the funds that may be distributed as extraordinary dividends under the Danish Companies Act. As a general rule, a purchase of a Company’s own shares for consideration requires authorization from the general meeting to the Company’s board of directors. Such authorization may only be given for a specified time, which may not exceed five years. However, where it is necessary in order to avoid significant and imminent detriment to the company, the board of directors may acquire the Company’s own shares on behalf of the company for consideration without authority from the general meeting.

Notwithstanding the above, Danish limited liability companies may, directly or indirectly, acquire their own shares (i) in connection with a reduction of the share capital; (ii) in connection with a transfer of assets by merger, division or other universal succession; (iii) in satisfaction of a statutory takeover obligation of the company; or (iv) in connection with the purchase of fully paid-up shares in a forced sale for the satisfaction of a claim held by the company.

Distribution of assets on liquidation

In the event of a dissolution or liquidation of the Company, the Company’s shareholders are upon completion of the Trading and Official Listing entitled to participate in the distribution of net assets in proportion to their nominal shareholdings after payment of the Company’s creditors.

4.5 Resolutions, authorisations and approvals

The Company’s Board of Directors is granted the following authorizations, as specified in the Company’s articles of association, to increase the Company’s share capital:

“2.2 Until 6 February 2020, the Board of Directors is authorized, in one round or more, to issue warrants giving the right to subscribe up to 500,000 shares of DKK 0.50 in the Company by cash payment corresponding to a nominal amount of DKK 250,000.00 and subsequently, in one round or more, to increase the Company’s share capital without preferential rights for the Company’s existing shareholders in connection with the issue of new shares to the Board and the employees as determined by the Board of Directors.

Warrants entitle the holder to subscribe for shares in the Company at a subscription exercise price determined by the Board of Directors - which may be up to 25% lower than the market price.

The Board of Directors is authorized to lay down the terms and conditions governing exercise of warrants and execution of capital increases pursuant to the above authorization. The Board of Directors is also authorized to make such amendments to the Company’s Articles of Association as may be required as a part of the exercise of this authority.

The Board shall annually determine concrete goals of economic or equivalent measurable nature of real importance to the Company’s value as a condition for the exercise of warrants.

Exercise of a warrant in the form of subscription of new shares may only take place during further defined periods made by the Board subsequent to the approved annual report for the year after fulfillment of the established goals.

The new shares shall be issued in the name of the holder and shall be recorded in the name of the holder in the Company’s register of shareholders, shall be negotiable instruments, and shall in every respect carry the same rights as the existing shares.”

“2.3 Until 6 February 2020, the Board of Directors is authorized to decide to obtain loans against issue of convertible notes with the right to subscribe for shares in the Company (convertible loans), and the Board of Directors is authorized to make the related capital increase, cf. provision 2.5, for up to a total nominal amount of DKK 5,000,000.

The abovementioned authorization can be used one or more times.

The shareholders of the Company shall not have pre-emption right when the Board of Directors makes use of the abovementioned authorization – neither in connection to the issuing of convertible notes nor in connection to the conversion of such convertible notes – and the convertible notes shall be issued at a conversion price which as a minimum corresponds to the market value at the time of the Board of Directors’ decision to issue such convertible notes.”

The terms and conditions for the convertible notes shall be determined by the Board of Directors, including rules of terms of loan and conversion of the notes, and the legal position of the recipient in case of a capital increase, capital decrease, issuance of new convertible notes or the dissolution, merger or demerger of the company before the time of conversion.

The Board of Directors can under due consideration of the Danish Companies Act reuse or reissue potentially lost, unused convertible notes, on the condition that the reuse or reissue is done within the terms and time limits of the abovementioned authorization. By reuse is meant the opportunity for the Board of Directors to let another party enter into an existing agreement on conversion right. By reissue is meant the opportunity for the Board of Directors within the same authorization to reissue new convertible notes if those already issued are lapsed.

The decision of the Board of Directors to raise convertible loans must be recorded in the Articles of Association and the Board of Directors is authorised to amend the articles accordingly.

"2.4 Until 6 February 2020, the Board of Directors is authorized, with preferential right for the existing shareholders of the Company, to increase the Company's share capital one or more times by up to a total nominal amount of DKK 25,000,000 by cash payment. The capital increase can take place below market price.

New shares issued pursuant to the above shall be issued in the name of the holder and shall be recorded in the name of the holder in the Company's register of shareholders, shall be negotiable documents and shall in every respect carry the same rights as the existing shares. The Board of Directors is authorized to lay down the terms and conditions for capital increases pursuant to the above authorization and to make any such amendments in the Company's Articles of Association as may be required as a result of the Board of Directors' exercise of the said authorization."

"2.5 Until 6 February 2020, the Board of Directors is authorized, without preferential right for the existing shareholders of the Company, to increase the Company's share capital one or more times by up to a total nominal amount of DKK 25,000,000 by cash as well as non-cash payment or by conversion of debt. The capital increase shall take place at market price.

New shares issued pursuant to the above shall be issued in the name of the holder and shall be recorded in the name of the holder in the Company's register of shareholders, shall be negotiable documents and shall in every respect carry the same rights as the existing shares. The Board of Directors is authorized to lay down the terms and conditions for capital increase pursuant to the above authorization and to make any such amendments in the Company's Articles of Association as may be required as a result of the Board of Directors' exercise of the said authorization."

2.6 Until 6 February 2020, the Board of Directors is authorized, with preferential right for the existing shareholders of the Company, to increase the Company's share capital one or more times by up to a total nominal amount of DKK 25,000,000 by conversion of the company's reserves into share capital by the issue of bonus shares (in Danish: fondsforhøjelse). The capital increase shall take place at market price.

New shares issued pursuant to the above shall be issued in the name of the holder and shall be recorded in the name of the holder in the Company's register of shareholders, shall be negotiable documents and shall in every respect carry the same rights as the existing shares. The Board of Directors is authorized to lay down the terms and conditions for capital increase pursuant to the above authorization and to make any such amendments in the Company's Articles of Association as may be required as a result of the Board of Directors' exercise of the said authorization."

"2.7 The combined total share capital increase, performed pursuant to the given authorisations in provision 2.3, 2.4, 2.5 and 2.6, cannot exceed nominal DKK 25,000,000."

Based on these authorizations, the Board has on 21 June 2016, resolved to issue 20,000,000 new Shares with a par value of DKK 0.50 each through a Rights Issue.

4.6 Issue date for the shares in the Rights Issue

The expected issue date for the Offer Shares is expected to be on or about 22 July 2016.

The Company reserves the right to extend the Subscription Period and any such extension of the Subscription Period will be announced through Oslo Axess' information system on or before 12:00 hours CEST 11 July 2016. An extension will only be made one time, and for no longer than until 16:00 hours CEST on 1 August 2016. In the event of extension, the allocation date, first trading date, payment date and the issue date of Offer Shares and other relevant dates will be extended correspondingly.

4.7 Restrictions on the free transferability of Shares

As a consequence of the following restrictions, prospective investors are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of the Shares offered hereby.

Other than in Norway and Denmark, the Company is not taking any action to permit a public offering of the Shares in any jurisdiction. Receipt of this Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, this Prospectus is for information only and should not be copied or redistributed. Except as otherwise disclosed in this Prospectus, if an investor receives a copy of this Prospectus in any jurisdiction other than Norway and Denmark, the investor may not treat this Prospectus as constituting an invitation or offer to it, nor should the investor in any event deal in the Shares, unless, in the relevant jurisdiction, such an invitation or offer could lawfully be made to that investor, or the Shares could lawfully be dealt in without contravention of any unfulfilled registration or other legal requirements. Accordingly, if an investor receives a copy of this Prospectus, the investor should not distribute or send the same, or transfer Shares, to any person or in or into any jurisdiction where to do so would or might contravene local securities laws or regulations.

Selling restrictions

United Kingdom

The Manager has represented, warranted and agreed that:

a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) received by it in connection with the issue or sale of any Offer Shares in circumstances in which Section 21(1) of the FSMA does not apply to the Company; and
b) it has complied and will comply with all applicable provisions of the FSMA with respect to everything done by it in relation to the Offer Shares in, from or otherwise involving the United Kingdom.

European Economic Area

In relation to each Relevant Member State, with effect from and including the relevant implementation date, an offer to the public of any Offer Shares which are the subject of the offering contemplated by this Prospectus may not be made in that Relevant Member State, other than the offering in Norway and Denmark as described in this Prospectus, once the Prospectus has been approved by the competent authority in Denmark and pass ported and published in accordance with the EU Prospectus Directive as implemented in Denmark, except that an offer to the public in that Relevant Member State of any Offer Shares may be made at any time with effect from and including the relevant implementation date under the following exemptions under the EU Prospectus Directive, if they have been implemented in that Relevant Member State:

a) to legal entities which are qualified investors as defined in the EU Prospectus Directive,

b) to fewer than 150, natural or legal persons (other than qualified investors as defined in the EU Prospectus Directive), as permitted under the EU Prospectus Directive, subject to obtaining the prior consent of the Joint Bookrunners for any such offer, or
c) in any other circumstances falling within Article 3(2) of the EU Prospectus Directive;

provided that no such offer of Offer Shares shall require the Company or any Manager to publish a prospectus pursuant to Article 3 of the EU Prospectus Directive or supplement a prospectus pursuant to Article 16 of the EU Prospectus Directive. For the purposes of this provision, the expression an “offer to the public” in relation to any Offer Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Securities to be offered so as to enable an investor to decide to purchase any Offer Shares, as the same may be varied in that Member State by any measure implementing the EU Prospectus Directive in that Member State the expression “EU Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

This EEA selling restriction is in addition to any other selling restrictions set out in this Prospectus.

The Offer Shares have not been and will not be registered under the U.S. Securities Act and may not be offered or sold within the United States. Mandatory takeover bids and compulsory acquisition rules.

Transfer restrictions

The Company’s Articles of Association does not contain provisions that are likely to have the effect of delaying, deferring or preventing a takeover, and the Company is therefore not subject to any restrictions than what follows from the legislation as stated below.

The Company is partly subject to the mandatory take-over provisions set out in Part 8 of the Danish Securities Trading Act, and partly the mandatory take-over provisions set out in the Norwegian Securities Trading act chapter 6.

Matters of a legal nature related to the information to be provided to the employees of the Company and matters relating to company law, including matters concerning the thresholds at which mandatory bid obligations are triggered, possible exemptions from the obligation to present a bid and exceptions from the mandatory bid obligation, will be subject to Danish law and be monitored by the Danish Financial Supervisory Authority.

However, for matters of a legal nature related to the bidding process, including questions concerning the compensation offered in connection with the bid, and in particular the bid price, the bid procedure, information on the bidder’s decision to present a bid, the content of the offer document and publication of the bid, will be dealt with under Norwegian law.

Danish law

Section 31 of the Danish Securities Trading Act includes rules concerning public offers for the acquisition of shares in Danish companies admitted to trading on a regulated market (including Oslo Stock Exchange and Oslo Axess) or an alternative marketplace.

If a shareholding is transferred, directly or indirectly, in a company with one or several share classes admitted to trading on a regulated market or an alternative marketplace, the acquirer shall enable all shareholders of the company to dispose of their shares on identical terms, if such transfer involves the acquirer obtaining a controlling influence. The rules also apply to multiple acquirers acting in concert.

An acquirer has a controlling influence when he directly or indirectly holds at least one third of the voting rights in a company, unless it is possible in special cases to clearly demonstrate that such holding does not constitute a controlling interest.

An acquirer, who does not hold at least one third of the voting rights in a company, nevertheless has a controlling influence when the acquirer:

has the right to control at least one third of the voting rights in the company in accordance with any agreement with other investors;
has the right to control the financial and operational affairs of the company according to the articles of association or an agreement; or
has the right to appoint or dismiss a majority of the members of the supervisory board or equivalent managing body and this body has a controlling influence in the company.

Warrants, call options and other potential voting rights, which may currently be exercised or converted must be taken into account in the assessment of whether an acquirer has a controlling influence. Exemptions from the mandatory bid requirement may be granted under certain circumstances by the Danish Financial Supervisory Authority.

Norwegian law

In the case a mandatory bid obligation is triggered, the offeror is required to prepare an offer document complying with Norwegian law, and such document requires approval by the takeover supervisory authority (the Oslo Stock Exchange, for companies listed on the Oslo Stock Exchange/Oslo Axess) before the bid is made public. In the mandatory bid, all shares of the company must be treated equally. The mandatory bid must be made in cash or contain a cash alternative at least equal in value to any non-cash offer.

4.8 Public takeover bids

No public takeover bids have been launched for the Company’s Shares during the last or current financial year.

4.9 Squeeze-out and redemption

Pursuant to Section 70 of the Danish Companies Act, shares in a company may be redeemed in whole or in part by a shareholder holding more than nine-tenths of the share capital and a corresponding proportion of the voting rights in the company. Furthermore, according to Section 73 of the Danish Companies Act, a minority shareholder may require the majority shareholder holding more than nine-tenths of the shares and the corresponding voting rights to redeem the minority shareholder's shares.

4.10 Taxation of shareholders and holders of subscription rights

Norwegian taxation

General

Set out below is a summary of certain Norwegian tax matters related to the purchase, holding and disposal of Offer Shares. The summary is based on Norwegian laws, rules and regulations applicable as of the date of this Prospectus, and is subject to any changes in law occurring after such date. Such changes could possibly be made on a retroactive basis. The summary does not address foreign tax laws. The summary is of a general nature and does not purport to be a comprehensive description of all the Norwegian tax considerations that may be relevant for a decision to acquire, own or dispose of Offer Shares. Potential shareholders who wish to clarify their own tax situation should consult with and rely upon their own tax advisers. Potential shareholders resident in jurisdictions other than Norway should consult with and rely upon local tax advisors with respect to the tax position in their country of residence.

Please note that special rules apply for shareholders that cease to be tax resident in Norway or that for some reason are no longer considered taxable to Norway in relation to their shareholding. Such shareholders are encouraged to consult their own tax advisors.

For the purpose of the summary below, a reference to a Norwegian or foreign shareholder company refers to tax residency rather than the nationality.

The summary below is based on the assumption that the Company is (i) considered to be genuinely established as well as tax resident in Denmark and (ii) considered to have genuine economic business activities in Denmark or another EEA country according to current Norwegian tax legislation and that the Company as such is a qualifying object under the Norwegian exemption method ("Qualifying Danish Company").

Foreign shareholders

Foreign shareholders who are not considered to be resident in Norway for tax purposes, have a permanent establishment or conduct business in Norway will normally not be liable to pay any Norwegian tax related to the holding of shares or subscription rights in a company tax resident in Denmark. Norwegian tax issues for foreign investors will therefore not be further addressed in the following.

Norwegian shareholders

In general, as the Company does not pay taxes to Norway, with Denmark as its home country, the Company is not responsible for withholding of taxes in Norway.

Taxation on dividends - Norwegian Corporate Shareholders

Norwegian corporate shareholders (i.e. limited liability companies, mutual funds, savings banks, mutual insurance companies or similar entities tax-resident in Norway) ("Norwegian Corporate Shareholders") are exempt from tax on dividends received on shares in a Qualifying Danish Company under the participation exemption (Norwegian: Fritaksmetoden).

Unless the shareholder owns more than 90% of the Shares in the Company, three percent of the dividends comprised by the participation exemption is to be entered as ordinary income taxed at the flat rate of 25%, implying that such dividends is effectively taxed at a rate of 0.75%.

The above relief from full taxation of dividend applies provided the dividend is lawful pursuant to Danish law. Otherwise, the dividend is taxable in full as ordinary income.

Taxation on dividends - Norwegian Personal Shareholders

Dividends distributed from a Danish Qualifying Company to Norwegian personal shareholders (i.e. shareholders who are individuals) ("Norwegian Personal Shareholders") are taxable to the extent the dividends exceed a

statutory tax-free allowance (Norwegian: Skjermingsfradrag). Dividends in excess of the tax-free allowance is multiplied with 1.15 and taxed at a flat rate of 25%. The effective tax rate for taxable dividends is hence 28.75%.

The allowance is calculated separately for each share as the tax purchase price of the share, multiplied with a determined risk-free interest rate, which will be based on the effective rate after tax of interest on treasury bills (Norwegian: statskasseveksler) with three months maturity. For 2015 the risk-free interest rate is set at 0.6%. The allowance one year will be allocated to the shareholder owning the share on 31 December the relevant income year. Norwegian Personal Shareholders who transfer shares during an income year will thus not be entitled to deduct any calculated allowance related to the year of transfer. The part of the allowance one year exceeding the dividends distributed on the share the same year ("unused allowance") will be included in the basis for calculating the allowance the next year. Any unused allowance may also be carried forward and set off against future dividends received on, and against gains upon the realisation of, the same share.

If certain requirements are met, Norwegian Personal Shareholders may be entitled to a tax credit in Norway for possible dividend withholding tax imposed in Denmark.

Taxation on dividends - Shares owned through partnerships

Partnerships are as a general rule transparent for Norwegian tax purposes. Taxation occurs at partner level, and each partner is taxed for his or her proportional share of the net income generated by the partnership, regardless of whether such income is distributed to the partners or not.

Dividends from shares in a Qualifying Danish Company is covered by the participation exemption and are not included in the basis for taxation of the partner's proportional share of the net income generated by the partnership. However, three per cent of tax-free net income under the participation exemption shall be entered as general income and taxed at the ordinary tax rate of 25% (implying that such dividend is effectively taxed at a rate of 0.75%) on the hands of partners taxable to Norway, regardless of whether such income is distributed to the partners or not.

Further taxation occurs when the dividends received are distributed from the partnership to the partners. For partners who are Norwegian individuals such distributions are taxable as ordinary income to the extent the distributed amount exceeds a tax free allowance. Distribution in excess of the tax free allowance is multiplied with 1.15 and taxed as ordinary income at a flat rate of 25%. The effective tax rate for taxable distributions is hence 28.75%. The amount of allowance is calculated the same way as the allowance for individual shareholders, ref. above.

For partners that are Norwegian corporations, only three per cent of distributions from the partnership are taxed as ordinary income at the flat rate of 25%, implying that such distributions are effectively taxed at a rate of 0.75%.

Taxation on capital gains on disposal of shares - Norwegian Corporate Shareholders

Sale, redemption or other types of disposal of shares is considered as realisation for Norwegian tax purposes. Norwegian Corporate Shareholders are exempt from tax on capital gains upon the realisation of shares in a Danish Qualifying Company. Losses upon the realisation and costs incurred in connection with the acquisition and realisation of such shares are not deductible for tax purposes.

Taxation on capital gains on disposal of shares - Norwegian Personal Shareholders

Norwegian Personal Shareholders are taxable in Norway for capital gains upon the realisation of shares in a Danish Qualifying Company to the extent the gains exceed a tax free allowance. Gain in excess of the tax free allowance is multiplied with 1.15 and taxed as ordinary income at a flat rate of 25%. The effective tax rate for capital gains is hence 28.75%. A loss is multiplied with 1.15 and is deductible from the ordinary income tax basis with a corresponding tax value of 28.75%. The tax liability applies irrespective of time of ownership and the number of shares realised. Gains are taxable as general income in the year of realisation, and losses can be deducted from general income in the year of realisation.

The taxable gain/deductible loss is calculated per share as the difference between the consideration received and the tax purchase price of the share and less costs incurred in relation to the realisation of the share. Any unused allowance on a share (see above) may be set off against gains upon the realisation of the same share, but this may not lead to or increase a deductible loss, i.e. any unused allowance exceeding the capital gain upon the realisation of a share will be annulled.

If the shareholder owns shares acquired at different points in time, the shares that were acquired first will be regarded as the first to be disposed of, on a first-in first-out basis.

Taxation on capital gains on disposal of shares - Shares owned through partnerships

However, capital gains upon realization of shares in a Qualifying Danish Company is covered by the participation exemption and is not included in the basis for taxation of the partner's proportional share of the net income generated by the partnership, but are treated as income under the participation exemption.

Taxation occurs when the dividends received are distributed from the partnership to the partners. For partners who are Norwegian individuals such distributions are taxable to the extent the distributed amount exceeds a tax free allowance. Distribution in excess of the tax free allowance is multiplied with 1.15 and taxed as ordinary income at a flat rate of 25%. The effective tax rate for taxable distributions is hence 28.75%. The amount of allowance is calculated the same way as the allowance for individual shareholders, ref. above.

Taxation of subscription rights

Norwegian Personal Shareholders

A Norwegian Personal Shareholder's subscription for shares pursuant to a subscription right is not subject to taxation in Norway. Costs related to the subscription rights will be added to the cost price of the shares.

Sale and other transfer of subscription right are considered as a realisation for Norwegian tax purposes. For Norwegian Personal Shareholders, a capital gain or loss generated by a realisation of subscription rights is taxable or tax deductible in Norway. Such capital gain is multiplied with 1.15 and taxed as ordinary income at a flat rate of 25%. The effective tax rate for taxable gains is hence 28.75%. A loss is multiplied with 1.15 and is tax deductible from the ordinary income basis with a corresponding tax value of 28.75%. The lapse of unused subscription rights that are purchased will cause a tax deductible loss.

Norwegian Corporate Shareholders

A Norwegian Corporate Shareholder's subscription for shares pursuant to a subscription right is not subject to taxation in Norway. Costs related to the subscription rights will be added to the cost price of the shares.

Sale and other transfer of subscription right are considered as a realisation for Norwegian tax purposes. Capital gains derived from the realization of subscription rights qualifying for the participation exemption method are exempted from taxation in Norway. Losses incurred upon realization of such subscription rights are not deductible.

Subscription rights owned through partnerships

Subscription for shares through partnerships pursuant to a subscription right is not subject to taxation. Costs related to the subscription rights will be added to the cost price of the shares.

Sale and other transfer of subscription right are considered as a realisation for Norwegian tax purposes. The tax effects of realisation of subscription rights owned through partnerships will be the same as described above for shares owned through partnerships.

Net wealth tax

For Norwegian Personal Shareholders, shares will be part of the shareholder’s capital and be subject to net wealth tax in Norway. The current marginal wealth tax rate is 0.85% of taxable values.

Listed shares are valued at 100% of their quoted value as of 1 January in the assessment year (the year following the income year).

Norwegian corporate shareholders are not subject to net wealth tax.

Duties on the transfer of shares or subscription rights

No stamp or similar duties are currently imposed in Norway on the transfer or issuance of shares or subscription rights in the Company.

Inheritance tax

Norway does not impose inheritance tax or similar tax on inheritance or gifts. However, the heir acquires the donor's tax input value of the shares based on principles of continuity. Thus, the heir will be taxable for any increase in value in the donor's ownership, at the time of the heir's realisation of the shares. However, in the case of gifts distributed to other persons than heirs according to law or testament, the recipient will be able to revalue the received shares to market value.

Danish taxation

General

The following summary of the consequences of Danish taxation is based on the rules and regulations applicable at the date of the Prospectus. The summary is based on applicable Danish laws, rules and regulations, as they exist as of the date of this Prospectus. Such laws, rules and regulations could be subject to change, possibly on a retroactive basis. The summary is only meant to provide general guidelines and does not deal with all aspects that could be important for potential investors. The tax treatment of each investor may depend on the individual investor's specific situation. Potential investors are encouraged to consult their own tax advisors in order to assess specific taxation consequences associated with investment in the Company and how taxation issues might possibly apply locally and abroad, or what the implications involved are, inter alia, possible changes in applicable taxation.

Any reference to a "Danish shareholder" or a "foreign shareholder" in the summary below refers to the tax residency and not the nationality of such shareholder.

Danish shareholders

Taxation of dividends - Personal shareholders

Dividends paid to individual investors are taxed as share income. The applicable tax rate varies and depends on the size of share income. Income up until DKK 50,600 (this amount is adjusted annually as from 2016) is taxed at 27%, while a higher tax rate of 42% applies to income exceeding DKK 50,600 (2016). For married couples cohabiting at the end of the income year the maximum limit for applying the 27% tax rate is DKK 101,200 (this amount is adjusted annually as from 2016) irrespective of which spouse receives the share income.

Dividends are subject to withholding tax of 27% upon distribution. If the share income in a given year solely comprises dividend income and does not exceed DKK 50,600/101,200 (2016), the withholding tax constitutes a final tax. The Company is responsible for withholding tax on dividends on behalf of the shareholder.

Taxation of dividends - Corporate shareholders

Taxation of dividends and capital gains of shareholders that are subject to Danish corporate taxation depends on the size of shareholding. In this regard the distinction is made between:

Shares of subsidiaries (subsidiary shares);
Shares of group enterprises (group shares); and
Portfolio shares

"Subsidiary shares" are shares owned by a shareholder holding at least ten per cent of the nominal share capital of the issuing company, provided that the latter is located in the EU/EEA or in a country with which Denmark has concluded a double taxation treaty.

"Group shares" are defined as shares in companies with which the shareholder is subject to Danish tax consolidation or where the requirements for international tax consolidation under Danish law are fulfilled. It is of no importance in which country the companies are resident as long as the companies are affiliated.

If the shares do not constitute group shares, subsidiary shares or other shares, they constitute "portfolio shares". In general, the shares constitute portfolio shares when the shareholder holds less than ten per cent of the nominal share capital in the issuing company.

Dividends received from subsidiary shares and group shares are tax exempt irrespective of the ownership period. Dividends received on portfolio shares are fully taxable at the general corporate income tax rate of 22% irrespective of the ownership period. These dividends are also subject to withholding tax, at the effective rate of 22%. The Company is responsible for withholding tax on dividends on behalf of the shareholder.

Taxation of dividends - Shares owned through partnerships

Partnerships are as a general rule transparent for Danish tax purposes. However, if controlling shareholders in the partnership is located abroad such partnership may under certain circumstances be treated as a taxable entity instead of a transparent entity.

When the net income is actually distributed to the shareholders in the limited partnership no additional taxation will occur.

Taxation upon realization of shares - Personal shareholders

Private individuals should include gain from the sale of shares in calculating taxable income, regardless of the ownership period and size of shareholding.

A gain realized on sale of shares is taxed as share income. The applicable tax rate varies and depends on the size of share income. Income up until DKK 50,600 (this amount is adjusted annually as from 2016) is taxed at 27%, while a higher tax rate of 42% applies to income exceeding DKK 50,600 (2016). For married couples cohabiting at the end of the income year the maximum limit for applying the 27% tax rate is DKK 101,200 (this amount is adjusted annually as from 2016) irrespective of which spouse receives the share income. The gain is calculated as the difference between the average acquisition cost of all shares in the issuing company and the received cash consideration.

Capital losses on listed shares can only be used to offset taxable gains and dividend income received from other listed shares. Losses on listed shares may only be set off against gains and dividends on other listed shares if the tax authorities have received certain information concerning the shares. This information is normally provided to the tax authorities by the securities dealer.

Any excess loss on listed shares of a spouse that cannot be deducted in own capital gain or dividends from listed shares will be transferred for deduction in a spouse's positive share income on listed shares. Any exceeding loss can be carried forward for subsequent income years and as a priority rule needs to be deducted in own positive

share income on listed shares first, before it will be transferred to a spouse. The carried forward losses need to be utilised in the earliest possible income year.

It is a condition for the deduction of losses of listed shares, that the Danish Tax authorities, before the end of the deadline for the tax return for the income year in which the listed shares are acquired, receive specific information on the shares identity number, the date of acquisition and the acquisition cost.

Taxation upon realization of shares - Corporate shareholders

Gains on disposal of subsidiary shares and group shares are tax exempt irrespective of ownership period. This entails that a loss is not deductible. Gains on disposal of listed portfolio shares are taxable at a rate of 22 %, while deduction is granted for losses.

Companies' gains or losses on listed portfolio shares are taxed based on mark-to-market principle. A gain or a loss is calculated as the difference between the value of the listed portfolio shares at the beginning and the end of the income year, beginning with the difference between the acquisition cost and the value at the end of the same income year. Upon realisation of the listed portfolio shares, i.e. redemption or disposal, the taxable income of that income year equals the difference between the value of the listed portfolio shares at the beginning of the income year and the value of the shares at realisation. If the listed portfolio shares have been acquired and realised in the same income year, the taxable income equals the difference between the acquisition cost and the price at realization.

Transition from the status of subsidiary shares/group shares to portfolio shares, and vice versa, is for tax purposes treated as disposal and immediate acquisition at market value at the time of status change.

Taxation upon realization of shares - Shares owned through partnerships

The taxation occurs at partner level, and each partner is taxed on its proportional share of the net income generated by the limited partnership regardless of whether such income is distributed to the partner or not. Such net income is taxed as if the partner had held the underlying assets personally. Companies being shareholder in the partnership are taxed each year based on a mark-to-market principle even if the partnership has not sold any shares, see above under "Corporate shareholders".

When the net income is actually distributed to the shareholders in the limited partnership no additional taxation will occur.

Net wealth tax

There is no Danish wealth tax.

Tax consequences related to the ownership and disposal of shares - Foreign shareholders

Taxation of dividends - Personal shareholders

Dividends distributed to non-resident individuals in respect of shares held in a Danish company are generally subject to Danish withholding tax at the rate of 27%. The Company is responsible for withholding tax on dividends on behalf of the shareholder.

Denmark has an extensive double taxation treaty network worldwide. Non-resident shareholders are normally eligible for a refund of a part of the Danish withholding tax paid where they are entitled to claim a reduction to the treaty rate. Shareholders resident in non-treaty states are not eligible for a lower withholding tax rate.

A separate regime for reduction of withholding tax to the relevant treaty rate is available to private individuals who are tax residents of the United States, Canada, Germany, the Netherlands, Belgium, Luxembourg, Norway, Sweden, Ireland, Switzerland, Greece and the United Kingdom. In order to qualify under this regime, a shareholder

must deposit his/her shares with a Danish bank, and the shareholding must be registered and administered by VP Securities A/S. In addition, such shareholder must provide certification from the relevant foreign tax authority as to the shareholder's tax residence and eligibility under the relevant treaty.

If the shareholder holds less than ten per cent of the nominal share capital in the issuing company and the shareholder is tax resident in a jurisdiction which has a double taxation treaty or a tax information exchange agreement with Denmark, such dividends are subject to Danish tax at a rate of 15%. However, Danish tax is withheld at a rate of 27% and the recipient must request a refund of Danish tax withheld in excess of the 15% or a lower rate set forth in the applicable double tax treaty. Where the recipient is tax resident in a country outside the EU, but in a country that has entered into an arrangement of exchange of information with Denmark it is an additional condition that the recipient together with associated parties does not own more than 10% of the shares in the company distributing the dividend.

Taxation of dividends - Corporate shareholders

Non-resident shareholders receiving dividend from subsidiary shares are not liable for Danish withholding tax irrespective of the ownership period, provided that the dividend taxation should have been reduced or relinquished under the European Union Parent-Subsidiary Council Directive (90/435/EEC) or a double taxation treaty between Denmark and the residency state of the shareholder. Furthermore, Danish withholding tax does not apply to dividends paid to foreign shareholders of group shares if the above listed conditions are met and provided that the foreign company is domiciled in the EU/EEA. It is a requirement for applicability of a reduced rate or exemption from withholding tax under double taxation treaties that the non-resident shareholder is the beneficial owner of the dividend in question, while for the protection right under the directive to apply, the generally applicable anti-abuse principles shall not have been violated.

Dividends from portfolio shares are subject to a withholding tax of 27%, regardless of the ownership period. The Company is responsible for withholding tax on dividends on behalf of the shareholder.

If Denmark has entered into a double taxation treaty with the country in which the shareholder is resident, the shareholder may seek a refund from the Danish tax authorities of the part of the tax withheld in excess of the tax to which Denmark is entitled under the relevant double taxation treaty.

If the shareholder holds less than ten per cent of the company's nominal share capital and the shareholder is tax resident in a jurisdiction that has concluded a double taxation treaty or a tax information exchange agreement with Denmark, and the shareholder is eligible for a reduction under the treaty/agreement, then the applicable withholding tax rate is 15%. However, Danish tax is withheld at a rate of 27% and the recipient must request a refund of Danish tax withheld in excess of the 15% or a lower rate set forth in the applicable double tax treaty. If the shareholder is tax resident outside the European Union, it is an additional requirement for eligibility for the 15% rate that the shareholder together with any group related shareholders holds less than ten per cent of the company's nominal share capital.

Taxation of capital gains upon realization of shares

Personal shareholders

Non-resident investors are in general not subject to capital gains taxation in Denmark upon disposal of shares. As an exception, gains and losses on the sale of shares that are attributable to a permanent establishment in Denmark are taxable.

Corporate shareholders

Non-resident investors are in general not subject to capital gains taxation in Denmark upon disposal of shares. As an exception, gains and losses on the sale of listed portfolio shares are taxed under the same rules as for Danish resident investors, in cases where these shares are attributable to a permanent establishment in Denmark.

Allotment, exercise and sale of listed subscription rights – personal shareholders

The allotment of subscription rights for shares which are admitted for trade on a regulated market for persons which are shareholders in the company or the exercise of such subscription rights does not entail taxation on the existing shareholders or the individual who receives the subscription rights.

Gains from sale of subscription rights are calculated in accordance with the share-for-share method which is the difference between the purchase price and the sales price. Subscription rights are taxed as ordinary shares and a gain realized on the sale of the subscription rights is taxed as share income while a loss may be offset against share income from listed shares. Allotted subscription rights are considered acquired for DKK 0, The purchase price for purchased subscription rights is the amount which has been paid for the subscription rights. Exercise of purchased subscription rights is the amount which has been paid for the subscription rights. Exercise of purchased subscription rights. Exercise of purchased subscription rights does not entail taxation on the shareholder.

Allotment, exercise and sale of listed subscription rights – corporate shareholders

The allotment of subscription rights for shares which are admitted for trade on the regulated market for companies which are shareholders in the company or the exercise of such subscription rights does not entail taxation on existing shareholders or the company who receives the subscription rights.

Subscription rights are taxed as ordinary shares and the taxation, therefore, depends on the size of the shareholding. Please note, that subscription rights are not included when the size of the shareholding is determined. If the company shareholder owns either subsidiary shares or group shares in the company, gains on listed subscription rights are tax exempt. Provided that the company shareholder owns portfolio shares in the company, gains on subscription rights will be taxed as ordinary corporate income at a rate of 22% in 2016, while deduction is granted for losses.

Company shareholders' gains and losses in listed portfolio subscription rights are taxed according to the mark-to-marked principle, as described above under "Taxation og shares – Corporate shareholders". Allotted subscription rights are considered to have been acquired for DKK 0. The purchase price for purchased subscription rights is the amount which has been paid for the subscription rights. Exercise of purchased subscription rights does not entail taxation on the shareholder.

Transition from the status of subsidiary subscriptions rights/group subscriptions rights to portfolio subscription rights, and vice versa, is for tax purposes treated ad disposal and immediate acquisition at market value at the time of status change.

Exercise and sale of subscription rights – personal shareholders

Allotment of subscription rights to physical persons who are not residing in Denmark does as a general rule not entail Danish taxation. Physical persons who are not residing in Denmark will usually not be liable to pay tax in Denmark on gains from subscription rights. If the foreign investor is deemed to be (1) a tradesman and (2) the subscription rights can be attributed to a permanent establishment in Denmark, the subscription rights will be taxed according to the same rules that apply to shareholders resident in Denmark.

Exercise of the subscription rights does not entail taxation in Denmark.

Exercise and sale of subscription rights – corporate shareholders

Allotment of subscription rights to companies which are not resident in Denmark, does as a general rule not entail Danish taxation. Companies who are not resident in Denmark will usually not be liable to pay tax in Denmark on gains from subscription rights. If the subscription rights can be attributed to a permanent establishment in Denmark, the subscription rights will be taxed according to the same rules that apply to shareholders resident in Denmark

Net wealth tax

There is no Danish wealth tax.

Duties on transfer of shares

There is no Danish share transfer tax or stamp duty upon transfer of shares.

Inheritance tax

When shares are transferred by way of inheritance, such transfer may give rise to inheritance tax in Denmark if the decedent, at the time of death, is a resident of Denmark for inheritance tax purposes, or if the shares are attributable to a permanent establishment in Denmark.

The basis for the computation of inheritance tax is the market value at the time the transfer takes place. The rate varies from 0% to 36.25%. For inheritance from for example parents to children, the maximum rate is 15%.

5. TERMS AND CONDITIONS OF THE RIGHTS ISSUE

5.1 The Rights Issue

The Rights Issue consists of an offer by the Company to issue 20,000,000 Offer Shares at a Subscription Price of NOK 1.50 per Offer Share, thereby raising gross proceeds of NOK 30 million.

Existing Shareholders will be granted tradable Subscription Rights that, subject to applicable law, provide preferential right to subscribe for and be allocated Offer Shares in the Rights Issue. Oversubscription and subscription without Subscription Rights will be permitted; however, there can be no assurance that Offer Shares will be allocated for such subscriptions.

In connection with the Rights Issue, the Company has on 21 June 2016 entered into underwriting agreements (the "Underwriting Agreement") with participants in an underwriting syndicate consisting of major shareholders, including primary insiders in the Company, and certain external investors (the "Underwriting Syndicate"). The total underwriting obligation of the Underwriting Syndicate corresponds to the gross amount to be raised in the Rights Issue of NOK 30 million (the "Underwriting Obligation"). For details on the Underwriting Syndicate, please refer to section 5.11.

The final allocation to investors will be determined by the Board in consultation with the Manager after expiry of the Subscription Period. The final result of the Rights Issue will be announced through Oslo Axess' announcement system as soon as the Rights Issue is completed, expected to be on 13 July 2016.

This Prospectus does not constitute an offer of, or an invitation to purchase or subscribe, any of the Offer Shares or Subscription Rights in any jurisdiction in which such offer or sale would be unlawful. No one has taken any action that would permit a public offering of Shares to occur outside of Norway or Denmark.

5.2 Conditions for completion of the Rights Issue

Completion of the Rights Issue is conditional on the following assumptions being fulfilled:

A. That the Board of the Company approves the final allocation of the Offer Shares to eligible investors, and
B. That the subscription amount is fully paid-up

In case the above conditions are not fulfilled, the Rights Issue will be withdrawn. If the Rights Issue is withdrawn or not carried out for any other reasons, all Subscription Rights will lapse without value, any subscriptions for, and allocations of, Rights Issue Offer Shares that have been made will be disregarded and any payments for Rights Issue Offer Shares made will be returned to the subscribers without interest or any other compensation. The lapsing of Subscription Rights shall be without prejudice to the validity of any trades in Subscription Rights, and investors will not receive any refund or compensation in respect of Subscription Rights purchased in the market.

Assuming that the conditions above are fulfilled the first day of trading of the Offer Shares on Oslo Axess, is expected to be on or about 22 July 2016. The Offer Shares will trade under the existing ticker code HUGO.

5.3 Timetable

The timetable below provides certain indicative key dates for the Rights Issue (subject to extension):

Last day of trading in the Shares including Subscription Rights	22 June 2016
First day of trading in the Shares excluding Subscription Rights	23 June 2016
Record Date	24 June 2016
Trading in Subscription Rights commences on Oslo Axess	27 June 2016
Subscription Period commences	27 June 2016
Trading in Subscription Rights ends	7 July 2016 at 16:30 hours CEST
Subscription Period ends	11 July 2016 at 16:30 hours CEST
Allocation of the Offer Shares	Expected on or about 13 July 2016
Publication of the results of the Rights Issue	Expected on or about 13 July 2016
Distribution of allocation letters	Expected on or about 13 July 2016
Payment date	Expected on or about 15 July 2016
Delivery of the Offer Shares	Expected on or about 22 July 2016
Trading and listing of the Offer Shares	Expected on or about 22 July 2016

5.4 Subscription period

The Subscription Period ("Subscription Period") is expected to commence at 09:00 CEST on 27 June and end at 16:00 CEST on 11 July 2016.

The Board of Directors, together with the Manager, reserves the right to extend the Subscription Period. Any extension of the Subscription Period will be announced through the information system of Oslo Axess no later than 12:00 CEST on 11 July 2016. An extension will only be made once, and for no longer than until 16:00 CEST on 1 August 2016. In the event of extension, the dates presented above are expected to change accordingly.

The Company will not close the Subscription Period earlier than 16:30 CEST on 11 July 2016.

5.5 Record date for Existing Shareholders

Shareholders who are registered in the Company's shareholder register in the VPS as of the Record Date (24 June 2016) will receive Subscription Rights. Provided that the delivery of traded Shares was made with ordinary T+2 settlement in the VPS, Shares that were acquired on or before 22 June 2016 will give the right to receive Subscription Rights, whereas Shares that were acquired from and including 23 June 2016 will not give the right to receive Subscription Rights.

5.6 Subscription Rights

Existing Shareholders will be granted Subscription Rights giving a preferential right to subscribe for and be allocated Offer Shares in the Rights Issue. Each Existing Shareholder will be granted 0.7913224220 Subscription Rights for every 1 Share registered as held by such Existing Shareholder at the expiry of the Record Date. The number of Subscription Rights granted to each Existing Shareholder will be rounded down to the nearest whole Subscription Right. Subscription Rights will not be granted for the Shares held in treasury by the Company. Each Subscription Right will, subject to applicable securities laws, give the right to subscribe for and be allocated one Offer Share in the Rights Issue.

The Subscription Rights will be credited to and registered on each Existing Shareholder's VPS account on or about 27 June 2016 under the International Securities Identification Number (ISIN) DK0060739050. The Subscription Rights will be distributed free of charge to Existing Shareholders.

The Subscription Rights may be used to subscribe for Offer Shares in the Rights Issue before the expiry of the Subscription Period on 11 July 2016 at 16:30 hours (CEST) or be sold before 7 July 2016 at 16:30 hours (CEST). Acquired Subscription Rights will give the same right to subscribe for and be allocated Offer Shares as Subscription Rights held by Existing Shareholders on the basis of their registered shareholdings on the Record Date.

The Subscription Rights, including acquired Subscription Rights, must be used to subscribe for Offer Shares before the end of the Subscription Period (i.e. 11 July 2016 at 16:30 hours (CEST)) or sold before 7 July 2016 at 16:30 hours (CEST). Subscription Rights that are not sold before 7 July 2016 at 16:30 hours (CEST) or exercised before 11 July 2016 at 16:30 hours (CEST) will have no value and will lapse without compensation to the holder. Holders of Subscription Rights (whether granted or acquired) should note that subscriptions for Offer Shares must be made in accordance with the procedures set out in this Prospectus and that the acquisition of Subscription Rights does not in itself constitute a subscription for Offer Shares.

Subscription Rights of Existing Shareholders resident in jurisdictions where the Prospectus may not be distributed and/or with legislation that, according to the Company's assessment, prohibits or otherwise restricts subscription for Offer Shares (the "Ineligible Shareholders") will initially be credited to such Ineligible Shareholders' VPS accounts. Such credit specifically does not constitute an offer to Ineligible Shareholders. The Company may instruct the Manager to, as far as possible, withdraw the Subscription Rights from such Ineligible Shareholders' VPS accounts, and sell them from and including 1 July 2016 to 7 July 2016 at 16:30 hours (CEST) for the account and risk of such Ineligible Shareholders, unless the relevant Subscription Rights are held through a financial intermediary (in which case no action will be taken to sell such Subscription Rights). Please refer to Section 5.10 "Financial Intermediaries" for a description of the procedures applicable to Subscription Rights held by Ineligible Shareholders through financial intermediaries.

The Manager will use commercially reasonable efforts to procure that the Subscription Rights withdrawn from the VPS accounts of Ineligible Shareholders (and that are not held through financial intermediaries) are sold on behalf of, and for the benefit of, such Ineligible Shareholders during said period, provided that (i) the Manager is able to sell the Subscription Rights at a price at least equal to the anticipated costs related to the sale of such Subscription Rights, and (ii) the relevant Ineligible Shareholder has not by 16:30 hours (CEST) on 30 June 2016 documented to the Company through the Manager a right to receive the Subscription Rights withdrawn from its VPS account, in which case the Manager shall re-credit the withdrawn Subscription Rights to the VPS account of the relevant Ineligible Shareholder. The proceeds from the sale of the Subscription Rights (if any), after deduction of customary sales expenses, will be credited to the Ineligible Shareholder's bank account registered in the VPS for payment of dividends. If an Ineligible Shareholder does not have a bank account registered in the VPS, the Ineligible Shareholder must contact the Manager to claim the proceeds. There can be no assurance that the Manager will be able to withdraw and/or sell the Subscription Rights at a profit or at all. Other than as explicitly stated above, neither the Company nor the Manager will conduct any sale of Subscription Rights not utilised before the end of the Subscription Period.

5.7 Trading in Subscription Rights

The Subscription Rights will be fully tradable and listed on the Oslo Stock Exchange with ticker code "HUGO T" from 09:00 hours (CEST) on 27 June 2016 until 16:30 hours (CEST) on 7 July 2016.

The Subscription Rights will hence only be tradable during part of the Subscription Period. Subscription rights that are not used to subscribe for offer shares before the expiry of the Subscription Period, or that are not sold before 7 July 2016 at 16:30 hours (CEST), will have no value and will lapse without compensation to the holder.

Persons intending to trade in Subscription Rights should be aware that the trading in, and exercise of, Subscription Rights by holders who are located in jurisdictions outside Norway or Denmark may be restricted or prohibited by applicable securities laws. Please refer to Section 4.7 "Restrictions on the free transferability of Shares" Selling and Transfer Restrictions" for a description of such restrictions and prohibitions.

5.8 Subscription Offices and subscription procedures

Subscriptions for Offer Shares in the Rights Issue must be made during the Subscription Period as set out below.

Investors being Norwegian citizens

Norwegian investors who wish to subscribe for Offer Shares can do this by submitting a correctly completed subscription form as set out in Appendix 4 to the Manager or by completing the subscription procedures on the internet at www.norne.no which will redirect the investor to the VPS online subscription system. In order to use the online subscription system, the investor must have, or obtain, a VPS account number. All online subscribers must verify that they are Norwegian citizens by entering their national identity number.

Investors being Danish citizens

Danish investors is likely to be holding Shares and Subscription Rights in the Company through financial intermediaries (nominee accounts or similar). Danish investors holding their Shares through a financial intermediary should contact the financial intermediary to receive information on the Rights Issue and in case they wish to trade the Subscription Rights and/or exercise the Subscription Right and subscribe for Offer Shares. Special reference is made to section 5.10.

Accurately completed subscription forms must be received by the Manager by 16:30 CEST on 11 July 2016. Any online applications must be completed by the same time. Subscription forms sent by regular mail close to the end of the Subscription Period are likely to arrive after the deadline. Neither the Company nor the Manager may be held responsible for delays in the mail system, busy facsimile lines or for non-receipt of subscription forms forwarded by mail, e-mail or facsimile to the Manager.

Properly completed and signed subscription forms must be sent by mail or e-mail, faxed or delivered to the Manager at the addresses set out below. Subscription for Offer Shares in the Rights Issue is irrevocable and may not be withdrawn, cancelled or modified once the subscription form has been received.

Norne Securities AS

Att: «HUGO»

Haakon VII's gt. 9

0161 Oslo, Norway

Phone: +47 55 55 91 30

E-mail: [email protected]

www.norne.no

Multiple subscriptions are allowed. In the event a subscriber submits two or more subscription forms, either by delivery of a regular subscription form, through the online subscription system or both, all subscriptions will be counted and accumulated. All subscriptions in the Rights Issue will be treated in the same manner regardless of whether the subscription is made by delivery of a subscription form to the Manager or through the VPS online subscription system.

There is no minimum or maximum subscription amount for subscriptions in the Rights Issue. Oversubscription (i.e., subscription for more Offer Shares than the number of Subscription Rights held by the subscriber entitles the subscriber to be allocated) and subscription without Subscription Rights is permitted. However, in each case, there can be no assurance that Offer Shares will be allocated for such subscriptions.

The Board and the Manager may, in their sole discretion, refuse any improperly completed, delivered or executed subscription form or any subscription which may be unlawful, without notice to the Subscriber. All questions

concerning the timeliness, validity, form and eligibility of any subscription for Offer Shares will be determined by the Board in its sole discretion, whose determination will be final and binding. The Board, or the Manager upon being authorized by the Board, may in its or their sole discretion waive any defect or irregularity in the subscription form, (and as such accept any incorrectly completed subscription forms), permit such defect or irregularity to be corrected within such time as the Board or the Manager may determine, or reject the purported subscription for any Offer Shares. It cannot be expected that subscription forms will be deemed to have been received or accepted until all irregularities have been cured or waived within such time as the Board or the Manager shall determine. Neither the Board, the Company nor the Manager will be under any duty to give notification of any defect or irregularity in connection with the submission of a subscription form or assume any liability for failure to give such notification.

5.9 Allocation, payment and delivery of Offer Shares

Allocation

Allocation of the Offer Shares will take place on or about 13 July 2016 in accordance with the following criteria:

(i) Allocation will be made to subscribers in accordance with the (subscribed and acquired) subscription rights used to subscribe new shares in the subscription period. Each subscription right will give the right to subscribe for and be allocated one (1) new share.

(ii) If not all subscription rights are used in the subscription period, subscribers having used their subscription rights and who have over-subscribed will be allocated remaining new shares on a pro rata basis. In the event that pro rata allocation is not possible due to the number of remaining new shares, the company will determine the allocation by drawing lots.

(iii) Any remaining new shares not allocated pursuant to the criteria in items (i) and (ii) above will be allocated to subscribers not holding subscription rights at the discretion of the Board in consultation with the Manager. The allocation principles will, in accordance with normal practice, include factors such as timeliness of order, relative order size and perceived investor quality and investment horizon. The Board and the Manager further reserve the right, at their sole discretion, to take into account the creditworthiness of any subscriber. The Board may also set a maximum allocation to any subscriber and allocations may be rounded.

(iv) Any remaining new shares that are not allocated in accordance with the above-mentioned criteria shall be allocated to the underwriters, to the extent that the underwriters have not fulfilled their subscription guarantee by subscribing for shares in the subscription period, based on and in accordance with their respective subscription guarantee.

No fractional Offer Shares will be allocated. The Company reserves the right to round off, reject or reduce any subscription for Offer Shares not covered by Subscription Rights.

Allocation of fewer Offer Shares than subscribed for by a subscriber will not impact on the subscriber's obligation to pay for the number of Offer Shares allocated.

The result of the Rights Issue is expected to be published on or about 13 July 2016 in the form of a stock exchange notification from the Company through the Oslo Stock Exchange information system. Notifications of allocated Offer Shares and the corresponding subscription amount to be paid by each subscriber are expected to be distributed on or about 13 July 2016. Subscribers having access to investor services through their VPS account manager will be able to check the number of Offer Shares allocated to them on 13 July 2016. Subscribers who do not have access to investor services through their VPS account manager may contact the Manager on 13 July 2016 to get information about the number of Offer Shares allocated to them.

Payment

Each subscriber in the Rights Issue with a Norwegian bank account must, and will by completing and signing the subscription form, provide a one-time authorization to the Manager to debit a specified bank account with a Norwegian bank for the amount payable for the Offer Shares allotted to such subscriber.

It is expected that the amount will be debited on or about 15 July 2016. However, there must be sufficient funds in the specified bank account from and including 14 July 2016. The Manager is only authorized to debit such account once, but reserve the right to make up to three debit attempts, and the authorization will be valid for up to seven working days after the payment date. If there are insufficient funds on the specified bank account or it is impossible to debit the specified bank account for the amount that the subscriber is obligated to pay, or payment is not received by the Manager according to other instructions, the subscriber’s obligation to pay for the Offer Shares will be deemed overdue.

Applicants who do not have a Norwegian bank account must ensure that payment for their Offer Shares allocated in the Rights Issue with cleared funds is made on or before 10:00 CEST on 14 July 2016 and should contact the Manager in this respect.

For late payments, penalty interest will accrue at a rate equal to the prevailing interest rate, pursuant to the Norwegian Act on Interest on Overdue Payment of December 17, 1976 no. 100, which at the date of this Prospectus was 8.75% per annum.

If a subscriber fails to comply with the terms of payment, the Offer Shares will, subject to the discretion of the Manager, not be delivered to the subscriber, and the Manager reserves the right, at the risk and cost of the subscriber (however, so that the subscriber will not be entitled to any profit therefrom), to cancel the subscription and to re-allot or otherwise dispose of the allocated Offer Shares on such terms and in such manner as the Manager may decide in accordance with Danish law. The original subscriber remains liable for payment of the Subscription Price for the Offer Shares allocated to the subscriber together with any interest, cost, charges and expenses accrued, and the Company or the Manager may enforce payment for any such amount outstanding.

Any excess amount paid by a subscriber will be returned to the bank account stated in the subscription form, within 5 business days after first day of trading of the Offer Shares. If no such bank account is stated, the Manager will contact the subscriber for obtaining refund details.

Delivery

All Applicants in the Rights Issue must have a valid VPS account to receive Offer Shares. The VPS account number must be stated when registering a subscription through the VPS online subscription system or on the subscription form. VPS accounts can be established with authorized VPS registrars, which can be Norwegian banks, authorized investment firms in Norway and Norwegian branches of credit institutions established within the EEA.

It is expected that registration of the share capital increase relating to the issue of the Offer Shares in the Rights Issue will be registered in the Danish Business Authority on or about 21 July 2016 and that the Offer Shares will be delivered in the VPS on or about 22 July 2016, provided that the subscriber has paid for the Offer Shares allocated to the subscriber when due.

Subscribers should be aware that delivery of the Offer Shares will only be made if the subscriber pays for the Offer Shares. Accordingly, any trades in the Offer Shares prior to delivery are at the sole risk of the subscriber.

5.10 Financial Intermediaries

General

Persons or entities holding Shares in the Company through financial intermediaries (i.e., brokers, custodians and nominees) should read this section. All questions concerning the timeliness, validity and form of instructions to a financial intermediary in relation to the exercise, sale or purchase of Subscription Rights should be determined by the financial intermediary in accordance with its usual customer relations procedure or as it otherwise notifies each beneficial shareholder. The Company or Manager is not liable for any action or failure to act by a financial intermediary through which Shares are held.

Subscription Rights

If an Existing Shareholder holds Shares registered through a financial intermediary as of expiry of the Record Date, the financial intermediary will customarily give the Existing Shareholder details of the aggregate number of the Subscription Rights to which it will be entitled. The relevant financial intermediary will customarily supply each Existing Shareholder with this information in accordance with its usual customer relations procedures. Existing Shareholders holding their Shares through a financial intermediary should contact the financial intermediary if they have received no information with respect to the Rights Issue.

Existing Shareholders who hold their Shares through a financial intermediary and who are ineligible for participation in the Rights Issue due to selling restrictions will not be entitled to be allocated Offer Shares in the Rights Issue.

Subscription Period and Period for Trading in Subscription Rights

The time by which notification of instructions for subscription of Offer Shares must validly be given to a financial intermediary may be earlier than the expiry of the Subscription Period. The same applies for instructions pertaining to trading in Subscription Rights and the last day of trading of such rights (which accordingly will be a deadline earlier than 7 July 2016 at 16:30 (CEST)).

Such deadline will depend on the financial intermediary. Existing Shareholders who hold their shares through a financial intermediary should contact their financial intermediary if they are in any doubt with respect to such deadlines.

Subscription

Existing Shareholders who are not ineligible for participation in the Rights Issue and who hold their Subscription Rights through a financial intermediary and wishes to exercise their Subscription Rights, should instruct their financial intermediary in accordance with the instructions received from such financial intermediary. The financial intermediary will be responsible for collecting exercise instructions from the shareholders and for informing the Manager of their subscription instructions.

A person or entity who has acquired Subscription Rights that are held through a financial intermediary should contact the relevant financial intermediary for instructions on how to exercise the Subscription Rights.

Method of Payment

Existing Shareholders who hold their Subscription Rights through a financial intermediary should pay the Subscription Price for the Offer Shares that are allocated to them in accordance with the instructions received from the financial intermediary. The financial intermediary must then pay the total Subscription Price for the Offer Shares in accordance with the instructions in this Prospectus. Payment by the financial intermediary for the Offer Shares must be made to the Manager no later than the Payment Date. Accordingly financial intermediaries may require payment to be provided to them prior to the Payment Date.

5.11 Manager and Underwriting

Underwriting

The Company has entered into Underwriting Agreements with certain investors, all dated 21 June 2016, pursuant to which these investors have undertaken to underwrite the Rights Issue for a total amount of NOK 30 million. The table below shows the subscription amount each underwriter in the Underwriting Syndicate has undertaken to guarantee:

Underwriter	Business address	Underwriting Amount (NOK)
Aula Holding ApS
(Henrik Kølle, CEO of Hugo Games)	Gammel Kongevej 120, 1. th., 1850
Frederiksberg C, Copenhagen, Denmark	12,500,000
MP Pensjon	Lakkegata 23, 0187 Oslo, Norway	5,000,000 (*)
Paw Capital ApS (Bertel Maigaard, chairman of Hugo Games)	Gothersgade 23, 3. sal, 1123 København K, Denmark	3,750,000 (*)
Bergen Sports Management AS	Strandkaien 16, 5013 Bergen, Norway	2,250,000 (*)
Støckler Invest ApS	Stormgade 133, 6715 Esbjerg N, Denmark	2,250,000
Pit Holding ApS	Århusgade 88, 3. sal, 2100 København Ø, Denmark	1,250,000 (*)
Toluma Invest AS	Strandveien 20, 1366 Lysaker, Norway	1,000,000 (*)
Buhl IT ApS	Solbakken 27, 2840 Holte, Denmark	750,000 (*)
Invest IT ApS	V Heisesvej 25, 3450 Allerød, Denmark	625,000 (*)
Ekman Holding ApS (Peter Ekman, CFO of Hugo Games)	Bysvinget 1 A, 8471 Sabro, Denmark	250,000
Maigaard og Molbech ApS (Bertel Maigaard, chairman of Hugo Games)	Østergade 17, 2. sal, 1100 København K, Denmark	250,000
Catalyzer ApS (Søren K Jensen, CTO of Hugo Games)	Ternevej 1, 2000 Frederiksberg, Denmark	125,000
Total		NOK 30,000,000

Underwriters denominated by () will upon completion of the Rights Issue receive an underwriting fee of 5% of the total Underwriting Amount.

Manager

The Rights Issue is managed and coordinated by the Manager.

Norne Securities AS

Oslo Office

Haakon VII's gt. 9

0161 Oslo, Norway

Phone: +47 55 55 91 30

E-mail: [email protected]

www.norne.no

6. TRADING AND DEALING ARRANGEMENTS

The Shares of the Company are not admitted, and the Company has not applied for trading and listing, at any other stock exchange or regulated market, than Oslo Axess (part of Oslo Børs).

Introduction

Oslo Axess is a regulated market operated by Oslo Børs ASA. Oslo Børs ASA was established in 1819 and is the principal market in which shares, bonds and other financial instruments are traded in Norway. Oslo Børs ASA operates i) Oslo Stock Exchange and ii) Oslo Axess, which are both regulated markets for shares.

Trading and settlement

Continuous trading on Oslo Axess takes place between 09:00 CEST and 16:20 CEST each trading day with a subsequent closing call from 16:20 CEST to 16:25 CEST. Orders may be placed in the system beginning at 08:15 CEST and ending at the end of post-trade at 17:15 CEST. The settlement period for trading on Oslo Axess is two days (T+2).

The ability of brokerage houses to trade for their own accounts is restricted to trading that occurs as an integral part of either investment services or general capital management. Trading by individual employees is also restricted.

Investment services may be provided only by Norwegian brokerage houses holding a license under the Securities Trading Act, branches of brokerage houses from an EEA-state or brokerage houses from outside the EEA that have been licensed to operate in Norway. EEA-state brokerage houses may also provide cross-border investment services into Norway.

It is possible for brokerage houses to undertake market-making activities in shares listed in Norway if they have a license to do so under the Norwegian Securities Trading Act, or in the case of EEA-state brokerage houses, a license to carry out market-making activities in their home jurisdiction. Such market-making activities will be governed by the regulations of the Securities Trading Act relating to brokers' trading for their own account. Such market-making activity, however, does not as such require notification to the Financial Supervisory Authority of Norway (Finanstilsynet) ("FSAN") or Oslo Axess except for the general obligation of brokerage houses that are members of Oslo Axess to report all trades in stock exchange listed securities.

Market making of the Company's Shares

The Company has entered into a market-making agreement for its Shares with the Manager and this will also apply to the Offer Shares once they are listed. The intention of the agreement is to encourage and provide liquidity in the trading of the Company's Shares. The Manager will provide binding bid and ask orders into the Oslo Axess' electronic trading system for a minimum bid and ask trading value of NOK 40,000 with a maximum spread of 4%, except if the price of the Shares in the Company falls below NOK 1.00, in which case the maximum spread between bid and ask can be NOK 0.10. Such bids and asks shall be effective at least 85% of the opening hours of the Oslo Axess. These bid and ask orders will be marked as "Market Maker" in the electronic trading system. The Manager can, under certain limited circumstances, be released from its duties to provide market making activity for short periods. If so, Oslo Axess must be informed of the reasons for the discontinuation. The Manager shall resume its duties as soon as possible. The Manager receives compensation for the liquidity provider agreement with the Company. The Manager assumes all market risk associated with the liquidity provider agreement. The liquidity provider agreement can be terminated with two months' notice.

Information, control and surveillance

Under Norwegian law, Oslo Børs ASA is required to perform a number of surveillance and control functions. The Surveillance and Corporate Control unit of Oslo Børs ASA monitors all market activity on a continuous basis and is responsible for the dissemination of information from listed companies to the market. Market surveillance systems are largely automated, promptly warning department personnel of abnormal market developments.

Companies listed on Oslo Stock Exchange and Oslo Axess, are subject to disclosure requirements pursuant to the Norwegian Securities Trading Act, Oslo Stock Exchange and Oslo Axess Continuing Obligations. Each listed company is inter alia required to immediately publicly disclose any precise information about the financial instruments, the company or other matters which may have a noticeable effect on the price of the financial instruments or related financial instruments, and which are not publicly available or commonly known in the market, unless there are legitimate reasons for postponement of such disclosure.

The VPS and Transfer of Shares

The Company's share register is operated through the VPS. The VPS is the Norwegian paperless centralized securities registry. It is a computerized bookkeeping system in which the ownership of, and all transactions relating to, listed shares on Oslo Stock Exchange/Axess must be recorded. All transactions relating to securities registered with the VPS are made through computerized book entries. The VPS confirms each entry by sending a transcript to the registered shareholder irrespective of any beneficial ownership. To effect such entries, the individual shareholder must establish an account with a Norwegian account agent. Norwegian banks, authorized securities brokers in Norway and Norwegian branches of credit institutions established within the EEA are allowed to act as account agents.

The entry of a transaction in the VPS is prima facie evidence in determining the legal rights of parties as against the issuing company or a third party claiming an interest in the given security.

A transferee or assignee of shares may not exercise the rights of a shareholder with respect to such shares unless such transferee or assignee has registered such shareholding or has reported and shown evidence of such share acquisition, and the acquisition of shares is not prevented by law, the Articles of Association or otherwise.

Foreign Investment in Norwegian Shares

Foreign investors may trade shares listed on Oslo Stock Exchange/Oslo Axess through any broker that is a member of Oslo Stock Exchange, whether Norwegian or foreign.

Disclosure Obligations

A person or entity which alone or together with close associates acquires Shares, options for shares or other rights to Shares resulting in its beneficial ownership, directly or indirectly, in the aggregate meeting or exceeding the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 or 90% of the share capital or the voting rights in the Company has an obligation under Danish law to notify the Company and the FSA, and under Norwegian law to notify Oslo Stock Exchange, immediately. The same applies to inter alia disposal of shares, options, other rights to shares or other circumstances resulting in a beneficial ownership, directly or indirectly, in the aggregate meeting or falling below said thresholds. Pursuant to Oslo Stock Exchange and Oslo Axess Continuing Obligations, the Company is required to immediately send to Oslo Stock Exchange any notices it receives in respect of disclosure of large shareholdings, however, this duty does not apply if the announcement has already been publicly disclosed.

Insider Trading

According to Danish and Norwegian law, subscription for, purchase of, sale of or exchange of shares which are listed or in respect of which an application for Trading and Official Listing has been submitted, or incitement to such dispositions, must not be undertaken by anyone who has precise information about the financial instruments, the company or other matters which may have a noticeable effect on the price of the financial instruments or related financial instruments, and which are not publicly available or commonly known in the market. The same applies

to entry into, purchase, sale or exchange of option or futures/forward contracts or equivalent rights connected with such shares or incitement to such disposition.

7. LOCK-UP AGREEMENTS

7.1 Lock-up agreements

The Company is not aware of any lockup agreements.

8. EXPENSE OF THE ISSUE

The gross proceeds to the Company from the Rights Issue will be NOK 30 million.

The Company will cover transaction costs and all other directly attributable costs in connection with the Rights Issue.

The transaction costs related to the Rights Issue are expected to be approximately NOK 5.3 million, giving net proceeds to the Company of approximately NOK 24.7 million.

9. DILUTION

Existing shareholders who do not participate in the Rights Issue will be diluted with a minimum and maximum amount of 20,000,000 shares, corresponding to approximately 44.2%.

10. ADDITIONAL INFORMATION

10.1 Advisors connected with the Rights Issue

The Rights Issue is managed and coordinated by Norne Securities AS, Haakon VII's gt. 9, 0161 Oslo – Norway (phone/facsimile/web: +47 55 55 91 30 / www.norne.no / [email protected]).

Advokatfirmaet Arntzen de Besche AS, Bygdøy allé 2, 0257 Oslo, Norway, has acted as Norwegian legal counsel to the Company in relation to the Rights Issue.

DELACOUR Law Firm, Langebrogade 4, DK-1411 Copenhagen, Denmark has acted as Danish legal counsel to the Company.

10.2 Information in the Securities Note which has been audited or reviewed by statutory auditors

No information in the Securities Note has been audited or reviewed by statutory auditors.

10.3 Statement regarding expert opinions

The Company has not relied on the services of experts in the preparation of this Securities Note.

10.4 Third Party Information

No information in this Share Securities Note has been sourced from a third party.

Hugo Games A/S
SHARE REGISTRATION DOCUMENT

STATUATORY AUDITORS

1.1 Current auditor

The Company’s independent auditor is Grant Thornton registered with the Danish Business Authority under organization number CVR 34 20 99 36 and with address Stockholmsgade 45, 2100 København Ø Denmark. Grant Thornton is a member of FSR – Danish Auditors. The responsible auditors are Ulrik Bloch-Sørensen and Martin Bomholtz.

Beierholm Revision, registered with the Danish Business Authority under organization number CVR 32 89 54 68 and with address Voergårdvej 2, 9200 Aalborg SV, Denmark has converted the Company’s financial statements for 2013 and 2014 into IFRS format. Beierholm Revision is a member of FSR – Danish Auditors.

INFO:REVISION has audited the Company’s IFRS financial statements for 2013 and 2014 as well as reviewed the 2015 Q1 report.

Grant Thornton has audited the Company’s IFRS financial statement for 2015 as well as reviewed the 2016 Q1 report.

INFO:REVISION and Grant Thornton has not audited, reviewed or produced any other report on any information provided in this Share Registration Document.

INFO:REVISION was appointed as auditor on 13 April 2011 but did not wish to audit a listed company.

Grant Thornton was appointed as auditor on 6 January 2016.

2. SELECTED FINANCIAL INFORMATION

The following table presents selected financial information for the Company for the years 2014 through 2015. The financial figures have been retrieved from the audited financial statements of 2014 and 2015.

Hugo Games A/S

Consolidated figures

DKK 1000	IFRS Review	IFRS Review	IFRS Audited	IFRS Audited
Profit and loss summary	31.03.2016	31.03.2015	31.12.2015	31.12.2014
Total Revenues	792	909	3,198	6,344
Profit /loss from operations	-6,014	-3,958	-33,909	-4,711
Result before tax	-6,004	-4,092	-37,122	-5,028
Result after tax	-4,716	-3,492	-29,431	-3,627
Balance sheet summary	IFRS Review 31.03.2016	IFRS Review 31.03.2015	IFRS Audited 31.12.2015	IFRS Audited 31.12.2014
---	---	---	---	---
Total intangible assets	43,872	39,225	41,574	35,498
Total tangible assets	57	15	64	21
Total financial assets	65	77	65	77
Total Prepayments	1,691	2,283	2,047	2,129
Total receivables	6,695	1,827	4,896	1,460
Cash and cash equivalents	7,461	12,261	14,594	11,958
Total Assets	59,841	55,688	63,240	51,143
Total equity	48,289	39,131	52,055	36,874
Total non-current liabilities	4,590	9,402	5,256	10,335
Total current liabilities	6,962	7,155	5,929	3,934
Total Equity and liabilities	59,841	55,688	63,240	51,143
Key figures	31.03.2016	31.03.2015	31.12.2015	31.12.2014
---	---	---	---	---
Numbers of shares	25,274,148	20,000,000	25,000,000	20,000,000
Dividends	0.0	0.0	0.0	0.0
Debt ratio (non current Liab/total Assets)	0.08	0.17	0.08	0.20
Earnings per share (year end number)	-0.19	-0.17	-1.18	-0.18

3. INFORMATION ABOUT THE ISSUER

3.1 History and Development of the Company

General

Hugo Games A/S is a Danish public limited liability company governed by the Danish Companies Act, registered with the Danish Business Authority under organization number CVR 3359 7142. Hugo Games A/S was incorporated on 13 April 2011.

The legal and commercial name of the Company is Hugo Games A/S. The Company’s registered business address is Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark and its e-mail address is [email protected]. The Company’s registered municipality is Frederiksberg. The Company’s website is www.hugogames.com. The Company does not have a public telephone number.

Events in the development of the issuer’s business

The table below highlights the most important historical developments from 2011 to the date of this prospectus.

Time	Historical milestones
2011	The Company was incorporated with a purpose to exercise commercial activities, including developing software and IT-based games and all other activities related hereto.
	Hugo Games Development ApS, incorporated in 2008, acquired all rights attached to the character HUGO and launched its first mobile game based on HUGO - Hugo Retro Mania.
2012	Hugo Games acquired the company Hugo Games Development ApS 1 July 2012. The Hugo-Group launched the second Hugo mobile game, Hugo Troll Race, which received more than 10 million downloads in the iOS app-store.
2013	In 2013, the Hugo-Group launched the third (Hugo World) and forth mobile (Hugo Troll Wars) game based on HUGO.
2014	During 2014 the Company intensified its work with the HUGO character and in December the Company signed an agreement in which Cristiano Ronaldo will be a central element of the gameplay of one of the first new mobile games to be released by Hugo in 2015. Cristiano Ronaldo will also market the game through his social media platforms.
	In September 2014 Hugo Games completed a private placement towards Hugo NewHold ApS (approximately 130 shareholders).
	In December 2014 the Company changed its structure from a private limited company to a public limited company and as a consequence hereof also changed its name from previously “Haaloo Games Holding ApS” to “Haaloo Games Holding A/S”.
2015	In February 2015 the Company changed its name from “Haaloo Games Holding A/S” to the current “Hugo Games A/S”.
	Hugo Games A/S re-launched its character Hugo for the mobile game marked with the game Ronaldo & Hugo Superstar Skater in June 2015.
	Hugo applied for Trading and Official Listing on Oslo Axess (stock exchange) on 19 May 2015.

On 26 June Hugo Games was listed on Oslo Axess.

In the fall of 2015 the organization and skills of the Company were further strengthened by the employment of 4 new employees.

2016

The Company launched the games Axe In Face II, Hugo Troll Race 2 and Ronaldo: Kick’n’Run.

The Company entered into agreements with the sport celebrities Nyjah Houston and Cameron Newton as well as Doodle Jump developer Lima Sky.

The Company secured an agreement with Samsung regarding the pre-installment of Axe in Face II in up to 5 million new Samsung mobile phones in China.

3.2 Investments

3.2.1 Principal investments

Over the period of the historical financial information, the Company has had investments in its intangible assets as detailed in section 9. There have not been any other major investments in the Company over the period of the historical information.

3.2.2 Investments in progress

There are no significant investments in progress that would classify as investments under the IFRS reporting routines of the Company; however, with reference to section 20, the Company is committed to payment of the remaining 30% of the non-disclosed fixed fee to Multisport & Image Management over the period 01-04.2016-31.12.2017, 75% of the non-disclosed fixed fee to Nyjah Houston, Inc., and 100% of the non-disclosed fixed fee to Cameron J. Newton Enterprises, Inc.

In addition, the Company intends to pursue an aggressive marketing and development schedule of its game portfolio but no commitments have been made with regards to specific amounts. Both the remaining payment to Multisport & Image Management, Nyjah Houston, Inc. and Cameron J Newton Enterprises, Inc., and the payment of marketing and development are expected to be financed through cash from increase of equity.

3.2.3 Investment plan

There are currently no additional investments planned.

4. BUSINESS OVERVIEW

4.1 Principal activities and markets

In the following chapters will be presented an overview of Hugo Games A/S and its subsidiaries, the character Hugo, the strategy and business model and marketing efforts of the Company as well as an overview of the industry and market in general.

4.1.1. EXECUTIVE SUMMARY

Hugo Games has since the launch of its first mobile game in 2011, Hugo Retro Mania - experienced an incredible market reception. Not only did both Hugo Retro Mania and Hugo Troll Race reach 10 million downloads organically without any marketing efforts, but we have also attracted attention from both investors and worldwide superstars like soccer celebrity Cristiano Ronaldo. We are also proud to announce that in 2016, Hugo Games has teamed up with global skateboard champion, Nyjah Huston, winner of Street League Skateboard Sereis in 2010, 2012 and 2014 as well as NFL Quarterback Cam Newton from Carolina Panthers.

We find ourselves in one of the most dynamic and promising industries in the world and thanks to the proliferation of internet-enabled devices, games are now reaching larger and more diverse audiences. The mobile games market is growing at a tremendous rate, and the market is in 2018 projected to generate more than USD 45 billion in mobile gaming revenues alone (source: Newzoo)

Building a robust pipeline for future success

In 2015 we expanded our game-studio with several strong industry experienced individuals, all with considerable track-records in the mobile gaming industry, hereunder but not limited to mobile strategy, digital marketing and game design. The resource expansion has enabled us to increase our in-house production capacity, go-to-market lead-time - thus giving us greater momentum in game development and content updates without sacrificing our demands to consistent quality.

Expanded product- and portfolio

2016 offers our strongest product line-up ever. With 3 titles released globally already in Q1 2016, whereas Cristiano Ronaldo: Kick'n'Run and Hugo Troll Race 2 initially show good performance figures, and Axe in Face 2 performs a little below expectations. We're of course expectant and excited about our remaining seven product releases throughout 2016.

Having executed our three-fold product strategy by spreading market and product risk across several IP's and game concepts, it is important to mention that Hugo still plays a major role in our product portfolio. Having successfully released Hugo Troll Race 2, early March 2016, we're now looking forward to our next release, Hugo Flower Flush, tapping into the highly successful match-3 game category, where games like the Candy Crush Series are generating massive revenues. In fourth quarter we aim to release Hugo Nordic, a city builder game taking place in a Nordic medieval environment.

2016 is also the year where we plan to release three new celebrity titles, celebrating our cooperation with social media phenomenon and football legend Cristiano Ronaldo as well as global skateboard champion, Nyjah Huston and NFL quarterback Cam Newton. Having learned from our earlier celebrity releases, we now ensure that each celebrity title will have a solid concept foundation within the celebrities own universe respectively.

Last but not least, we're developing a street soccer game aiming for release in connection with this year's Euro Cup. Apart from being a football themed game, the title will feature rich social elements, such as creating teams, competing against other players and wearing customizable national clothing to stand out. - Henrik Kølle, CEO Hugo Games

4.1.2. HUGO GAMES ACTIVITIES

Hugo Games is a mobile gaming company formed in 2011. Hugo Games' main activity is to develop and globally publish mobile games within the genre categorized as "Casual" mobile games. The best way to define casual mobile games is games with a low learning curve that can be picked up quickly and easily. Furthermore, it is also a characteristic that casual games have short play session in the range of a couple of minutes up to 15 minutes and that they are mostly playable on a mobile device regardless if the device is on-line or not (no access to Wi-Fi or mobile-net).

The Casual/Super Casual (sub-category of "Casual") genre is our greatest focus and where majority of our current and upcoming games is located. How we perceive our world is mainly, but never exclusively, through this genre. Based on top grossing app store rankings from Apple and Google it is currently among the most popular genres within mobile gaming. Hugo Games mobile games developed and published with Hugo the troll as well as mobile games where we introduce external IP's, such as Cristiano Ronaldo, Nyjah Huston and Cam Newton, will be within the category Casual/Super Casual. Hugo Games also provides manufacturers with licensing agreements to produce products branded with Hugo The troll. Furthermore, in the coming years, Hugo Games intends to continue its development and publishing of independent and self-sufficient game brands which are not based on the Hugo character.

Hugo Games is built on a unique and passionate company culture. We are a team of proven digital media and app distribution experts located in the heart of Copenhagen, and we have a vision that our beloved IP, Hugo the Troll, will conquer the world.

We are committed to provide exceptional gaming experiences that PEOPLE recommend to family and friends, EMPLOYEES are proud of and INVESTORS seek for long-term returns.

Our VISION is to become a Nordic tier-one mobile company by end 2018.

Our AMBITION is determination to provide exceptional gaming experiences that PEOPLE recommend to family and friends, EMPLOYEES are proud of and INVESTORS seek for long term returns.

4.1.3. HUGO'S HISTORY

HUGO'S HISTORY

THE HUGO CHARACTER

Hugo's story begins in 1989, where Hugo originally entered the world in a live Danish television game show. Following an immensely successful debut on Danish TV (and continued success for eight years), he rapidly became a global entertainment phenomenon.

As Hugo was franchised to more than 40 countries, he became a primetime star, watched and adored by more than 400 million people worldwide. In 2009, the Royal Library of Denmark declared Hugo to be one of the core representatives of the national digital cultural heritage.

Much of Hugo's success came from his interactive nature, localization and because he spoke in each local language, which all made the audiences feel that Hugo was exclusive to their national culture. Many people today still feel that Hugo the Troll originates from their country, and people are eagerly waiting to reunite with him.

According to a 2013 key territory survey made by YouGov and Epinion, Hugo's brand awareness is almost identical to the level of the 90s when Hugo aired on television across the globe.

Hugo still lives in the generations who experienced him on TV, and new users will get to know him as an essential and central character of the newest technological paradigm within entertainment - the age of the app.

HUGO'S HISTORY

HUGO BRAND AWARENESS

Hugo's journey from a TV-star to a console game icon has provided him with an extraordinary high brand awareness rate. A strong and well-known brand has become the most critical parameter if you want to make it big in the highly competitive gaming industry.

Source: Research from Epinion and YouGov who performed analysis in each individual country.

HUGO'S HISTORY

HUGO IN VIDEOGAMES

Few videogame characters have been through the same journey as Hugo the Troll. Creating the industry in the dawn of the 1990s, Hugo blazed the trail for a new technology that changed the notion of interactive gaming. The TV game show became a commercial success and expanded throughout the world in the decade to come, reaching 40 countries and a viewership of 400 million people.

As the market moved towards console- based gaming solutions such as Amiga, PC PlayStation and Gameboy in the late 1990s, the Hugo character moved along as well. Hugo followed the stream with great success with beloved titles as Agent Hugo, Hugo: The Evil Mirror and Hugo Bukkazoom! We still today receive weekly requests from fans, who ask for purchase directions or wants us to re-release the games.

In November 2011, Hugo took the next step into modern pop culture. The first app "Retro Mania" went live as a pay-to-play game in 17 different languages. The game debuted as number 1 in 11 countries and made it to the top five in 20 other counties (source: AppAnnie). The game has now been downloaded more than 10 million times, and the official game trailer has 1.3 million views on the official Hugo YouTube channel, clearly indicating that the world, once again, is ready for more Hugo.

4.1.4. THE INDUSTRY

THE INDUSTRY

SPOT ON COMPETITION

The illustration below shows how the overall gaming industry, including the Casual genre, is both affected by very small, 1-2 person, independent (indie) developers, large cross-platform companies and everything in between. Barriers of entrance in the industry are small, equaling the chances for success. Therefore, both large companies and small indie developers have our equal focus. The Casual genre consists of a variety of different games and a large number of competitors. Thus, users of Casual games can choose between a large number of games and consequently it is not possible to identify specific competitors which are more important than others.

The mobile gaming industry is extremely fragmented. Few larger companies own a larger market share, but the industry situation and market demand allow a yield of smaller companies and indie developers to thrive even with a fraction of the larger market.

Presented below is a small segment of some of the most prominent and vocal mobile game developers. Especially Supercell, King, Glu Mobile and Rovio are companies we not only admire, but also a source of guidance, though with a critical sense.

| | Glu Mobile
- Best known for: Kim Kardashian Hollywood
- Acquired CIE for $100 million.
- Listed on NASDAQ in 2007
- Market cap at $487 million (as of March 2016) |
| --- | --- |
| | King.com
- Best known for: Candy Crush Saga, Bubble Witch Saga
- Acquired by Activision Blizzard for $5.9 billion.
- Listed on NYSE in 2014
- Market cap at $5.7 billion (as of March 2016) |
| | Zynga
- Best known for: Farmville, Draw Something
- Listed on NASDAQ in 2007
- Market cap at $1.97 billion (as of March 2016) |
| | Supercell
- Best known for: HayDay, Clash of Clans
- SoftBank acquired 51% of the company for a reported $2.1 billion in 2013
- Valuation $8 billion (as of March 2016) |

Rovio

Best known for: Angry Birds series
Stake sold to Accel Partners
Valuation $280 million (as of March 2016)

THE INDUSTRY

SPOT ON CONSUMERS

The gaming community has for a long time battled a social stigma around the activity as being only for an exclusive, limited tech-savvy, perhaps "nerdy", subgroup. This assumption, though, has come to an end. Games today are reaching a larger and more diverse audience because services and devices have reached a much more mainstream audience, and games are appearing in a variety of forms catering every section of the population. The opportunities today are endless.

Who is the typical gamer?

Today, everyone is a gamer. An Ericsson Consumer Insight Summary Report from 2014 showed that $85\%$ in South Korea, $75\%$ in the US and $53\%$ in Brasil play fixed or mobile games at least every month. $50\%$ of these in the US were over 34 years old, whereas, in South Korea, $50\%$ were over 40. Just as the gamers have different profiles, their motivations for playing can also be varying. One person may focus on the game experience, very closely concentrating on the challenge and the pleasure - a term we call game immersion. Another person may focus on the reward element or to reach a goal and lastly, games may be played as a means of socializing and interacting with other people.

Conclusively, the lesson is that everybody is a gamer now and creating clusters of consumer groups is a challenge as the audience becomes more and more fragmented. Audience profiles and segment specific behavior will therefore be characterized within each specific game.

Time spent playing mobile games

The mainstream audience has without doubt adopted gaming as a viable source of entertainment. Games are responsible for $32\%$ of all time spent on iOS and Android devices. The average time spent playing mobile games in 2014 increased by $57\%$ compared to 2012 (NPD Group). The same research revealed that today, people spent, on average, about 3 hours every day playing games, a significant increase from 2 hours and 20 minutes In 2012. Larger devices such as tablets and phablets especially lead this trend.

Casual gaming

Majority of our upcoming games will most likely be within the 'Super Casual' genre. The super casual genre is characterized by a very simple gameplay. Super casual games are, from the viewer's perspective, easy to approach and require no larger, long-term commitment or skills. They are often played while the gamer is bored or doing something else such as watching TV. People spend more and more time on their phones and tablets. The game- category "super casual" became once again the spotlight of 2015. Among top apps, one or more "super casual" games finished in the top 10 by monthly downloads for 10 out of 12 months in 2015, lending further credence to the theory that a broad swath of mobile users consume games in simple bit-sized portions (AppAnnie). The "Super casual" category fits perfectly to the core of Hugo, who's "DNA" is easy-going, easy-play fun, as with our other non-Hugo IP's and concepts.

4.1.5. OUR STRATEGY

OUR STRATEGY OVERVIEW

Hugo Games overall strategic objectives:

OUR STRATEGY

GENERAL MOBILE GAMING BUSINESS MODEL

Within the market of mobile gaming, "freemium" has become the dominant business model in the digital sphere. Freemium – a combination of the two words "free" and "premium" – describes a model in which you give a core product away for free to a large group of users and sell premium in-game content to a smaller fraction of this same user base. In other words, customers have access to a game's or product's basic functionalities, but there is a charge for advanced functionality, extra features, premium content and other product-specific benefits.

Even though it is tempting to compare the freemium approach with a free sample or trials, it is quite the contrary when considering the economic structures behind. Hypothetically, instead of giving away 1% of the products to sell 99%, you give away 99% of your products to sell 1%. The reason why this makes sense is that, in a digital environment, there are different cost structures and there are no limitations to production and distribution. Once the digital product is developed, it doesn't carry any per-unit production costs and, thus, can be replicated for no costs. The only expenses in digital distribution are platform fees and maintenance, which results in marginal costs close to zero. Eventually, the 99% don't cost you much to give for free, but the 1% you convert is 1% of a large number. In digital gaming, companies can structure their costs so they can break even if as little as 3-10% of the users pay. Anything exceeding that is profit.

A second distinction is the scope of functionality. Whereas the trial or sample provides time-limitations or merely a fraction of the full product, freemium products exist as fully featured entities, even though it is provided for free. As the price of $0 allows accessibility to the largest number of people, most users will never engage with the product beyond the free tier. But if the product is appealing while presenting an opportunity to make purchases that further improve the user experience, a portion of the user base may spend more money than they would have if the product had cost a set fee. However, the balance is delicate; offer too little and people will not play for long, offer too much and people will not have an incentive to spend money.

The freemium business model represents a fundamental evolution given the digital environment in which products are distributed and consumed. Internet-enabled devices give users access to products in the blink of an eye and digital distribution channels allow products to be purchased without the need for any physical or tangible artifacts or payment mechanisms.

HUGO GAMES' BUSINESS MODEL

Hugo Games' business model is to focus on two main revenue streams, which together create the net revenue reflected in Hugo Games existing and future financial reports: In-game purchases and In-game advertisements. Essentially, our business model is dependent on our skills in accumulating a large number of users. The first revenue stream comes from converting the largest possible pool of players to pay for additional game content. Secondly, we gather information and data on all of our users, which are sold to app publishers who place targeted ads in our games.

In-game purchases

The first revenue stream is based on customer purchases. This revenue stream is implemented in all existing games from Hugo Games and will likewise be implemented in all future games.

This sales-strategy involves selling virtual goods within the virtual framework of the game to improve a character or enhance the playing experience. One example is that a player can buy a new skateboard in Hugo SuperSkater that boosts the speed of the player. There are unlimited versions of virtual goods, and they can range from cosmetic, such as decorative character/game attire, to functional, such as weapons, upgrades and items, to relational, such as extra lives, replays and unlocks.

Some of our games allow players to acquire items that can be purchased through normal means and some of our games have included a micro transaction system that both ease purchase process and sustain the players in the game experience. With micropayments we often use two in-game currencies, one earned through normal gameplay and another, which can be purchased with real-world money. The second, "premium" currency is sometimes given out in small amounts to non-paying players, which intrigues players to convert real-world money to virtual-world currency.

The virtual goods that the player receives in exchange for real-world money are non-physical and can therefore exist in a constantly iterative process, meaning we can use the data and information we gather from our players to continuously improve our virtual goods and services, both in terms of how much the individual elements should cost and which items we should introduce to the game. The develop-as-you-go approach clearly contrasts the original "premium" business model, where players pay upfront for a complete virtual game. The feedback loop we gain by tracking players' virtual movement, transactions and advancement in the game allow us to continuously improve the game experience and optimize our monetization metrics.

In-game advertising

In-game advertising refers to advertising within the virtual context of the game. When the players play mobile games published by Hugo Games, advertisements will appear in the app and Hugo Games will receive revenues from the advertisers. This revenue stream has already been implemented in existing games and will likewise be implemented in future games from Hugo Games.

These advertisements can be integrated into the game either through a display in the background, commercials during the sequences or as static banners. The advertisements can also be highly integrated within the game, meaning that if the users watch an advertisement, they are rewarded in premium currency or limited features.

Advertisers are truly beginning to recognize the potential of digital advertising and the trend will only intensify in the years to come. Given that video games are so immersive the full effect of the ad registers on the viewer because they are often very invested in the game. The interactivity of games also allows for a more clever and subtle forms of advertising and at Hugo Games, we are experimenting with working marketing messages covertly into the gameplay in a way that feels as a part of the experience, rather than bombarding gamers with logos or slogans.

As our users are often connected to the Internet, our in-game advertising options are highly customizable. Based on the data we collect, the marketers can change and segment their advertisements at any time, choosing when ads show up and whom they target. Consumer behavior and advertising data are collected and in real time through pre-installed in-app SDK's, meaning that we are able to access the information in real time in order to optimize running advertising campaigns as well as optimizing future campaigns for improved performance and revenue streams.

Hugo Games' cost structure

In terms of cost structure Hugo Games' business model is based on a slim and flexible organisation in the sense that the organisation has a very flat structure between the management, production teams and marketing- and analytics staff.

The current cost structure can be divided in two major categories:

Fixed cost
The main fixed cost is remuneration of employees and other fixed costs are minor such as rent, travelling, auditors, bureau, etc.
Variable costs
External development costs, i.e. costs to other companies than Hugo Games, which develops mobile games for and on behalf of Hugo Games, i.e. Fuzzy Frog and Funday Factory.

Marketing costs is another significant variable costs, which covers Hugo Games running user acquisitions campaigns, placing ads for Hugo Games' games in other third party games, etc., as well as related costs such as producing videos, images, etc.

Material changes affecting Hugo Games' activities

The only material change to the Company's activities, also affecting the overall strategy, is the company strategy with regard to signing celebrities as business partners. This decision was initially made in 2014 upon signing Christiano Ronaldo, which made the company tap into the recent trend of signing celebrities into mobile games. Since this change is fairly new, the effect cannot yet be read in the Company's annual accounts. The expected result from this is further described under section "Upcoming Games".

In general and over the last tree years Hugo Games has primarily focused on developing new games. In this period the Company has not experienced any other material changes affecting its activities, besides the fact that the overall market has grown as further described in chapter 10 "Trend Information".

Revenue from two previous financial years

Hugo Games' above mentioned business model has generated revenues in previous financial years, both in terms of games and in-app purchases and advertisements.

In 2014 in-app purchases generated a revenue of DKK 5,213,000, and in 2015 DKK 1,671,000. With respect to advertisement, the revenues generated from the business model was DKK 874,000 in 2014, and DKK 1,340,000 in 2015.

These figures are based on existing games already launched by Hugo Games as further described below in chapter 4 under the headline "Existing Games".

OUR STRATEGY

TECHNOLOGY

With new devices continuously being introduced to the market, faster processing power, higher screen resolution and an increasing demand of state of the art graphics and support of multiple platforms, it's a must that we are able to adapt and respond fast to these changes.

GAME ENGINE

This is where all the various graphic, game code, sounds effects and other assets are being implemented into a playable game. This is where we push "build" in order to make a file we can submit to Apple, Android, Facebook etc.

We use 3rd party game engines to power our games. The criteria for our choice of engine are based on the following:

A strong cross-platform foundation, supporting the latest devices and platforms and continuously adding support for new updates.
"One-Click-Creation" of our games already released, so we can release these on other platforms, if the opportunity emerges.
Agile development where we are able to prototype and can build games on top of these prototypes without vesting code and graphics.
Re-use of code and graphics where applicable.
Support for 3rd-party SDK: Video, Social Media.
Latest state of the art graphics capabilities.

BACKEND/SERVER

The Backend handles all database settings and administration of our games. This is where all the user data is stored, such as level reached, score, purchases. This is also where localization and In-App purchases is being handled.

We are using our own proprietary backend solution, DigiStarter, for our games. DigiStarter is a very agile and scalable backend system that runs on top of Microsoft Server technology, which includes:

Player Administration Module: The module handles all database information, such as player information and game related data.
Assets Administration Module: New assets, as new graphic elements are created on the server. These can then be turned on and off "real time".
Localization Module: Fully support of any language of choice. Can be updated "real time".
A fully customized in-game banner module: The banner system supports all major App Stores and support for new app stores and services can easily be added. Feature custom settings, so we can target a specific market or customer section. New offers can be added "real time".

4.1.6. EXISTING GAMES

In 2011, Hugo Games Development ApS took over the Hugo IP (Hugo Games Development ApS was later acquired by Hugo Games in July 2012), which initiated the next phase of the Hugo story by the release of the app game Hugo Retro Mania. The following game to be released was "Hugo Troll Race", which quickly reached more than 10 million downloads organically (without any marketing efforts). In 2013 we quickly followed with two more games: "Hugo Troll Wars", an epic online combat strategy game and "Hugo World", a collect-themall/ simulation game. Hugo Games currently owns the rights via Hugo Games Development ApS for four Hugo related mobile games and several games are planned for the future.

Hugo Retro Mania. November 2011

Hugo Retro Mania was the first Hugo app-title released by Hugo Games Development ApS. Hugo Retro Mania was originally released in November 2011 but is still going strong with more than 45.000 daily active users (DAU's). Hugo Retro Mania debuted at number one in 11 countries and made it into the top 20 in other countries. Since then Hugo Retro Mania has been downloaded more than 10 million times.

Hugo Troll Race Classic. July 2012

Hugo Troll Race was the second Hugo app-title released in July 2012 with a number one ranking in 25 countries and with more than 1 million downloads in just three days. Since then and hardly with any marketing efforts, the game has been downloaded more than 10 million downloads proving that Hugo is still very much alive.

Hugo Troll Wars, September 2013

Hugo Troll Wars was launched late 2013 as a multi-platform strategy game covering all viable mobile platforms, iOS, Android, Amazon, Windows and Facebook. Hugo Troll Wars was initially launched exclusively on Amazon with 14 days sales period securing Hugo Troll Wars features on select Amazon devices such as Kindle Fire and Kindle FireHD. Following the release on Amazon Hugo Troll Wars was successfully released on all the remaining distribution platforms.

Hugo World, December 2013

Hugo World was the second app-title launched in 2013. Hugo World was originally meant to be a content mix between the HayDay and DragonVale genre combining their mechanics to ensure player engagement. However, the content learning curve proved too challenging and Hugo World was rebalanced to accommodate a more casual gameplay.

Ronaldo: Super Skater, June 2015

Super Skater was released in June 2015 and quickly reached more than 7 million downloads thus proving how strong combining a well know IP with a game can be. However, it was learned that when utilizing a socially strong IP it is important to make a concepts and game that is true to the fans of the IP. Current status: Having learned to keep celebrity concepts in line with the DNA of the actual IP further development on the title has been halted, but a new and more streamlined football related concept with Ronaldo is scheduled for release in Q2 2016: Ronaldo Kick & Run.

Axe in Face, February 2016

Axe in Face was successfully released in February 2016; and being a much anticipated sequel to the original Axe in Face, winner of Best Nordic Handheld Game in 2011, expectations is somewhat high.

Hugo Troll Race 2, March 2016

Troll Race 2 is the sequel to the original Troll Race which is still a very popular title. Troll Race 2 was released beginning of March 2016 where it was featured by both Apple and Google resulting in more than 1.000.000 downloads in the first week. Current status: All data on Hugo Troll Race 2 are still looking very promising.

Ronaldo Kick’n’Run, June 2016

Kick’n’Run, featuring Cristiano Ronaldo is a true street football runner game, where shooting your football at several targets while moving forward is the core gameplay. However, the game also offers several in-depth features as creating teams with friends and compete in weekly tournaments.

Flower Flush, June 2016

Flower Flush is the company’s first aim in creating a great concept within the very popular match3 game genre. The title is currently in soft-launch and current analytics look very promising. Flower Flush is set for global release in June 2016.

PRODUCT DEVELOPMENT

4.1.7. UPCOMING GAMES

Although the games genres, content and business models are outlined, many titles are still in early conceptual stage, why further market analytics and consumer segmentation may affect the roadmap ahead.

Primarily, we will aim to exploit Hugo's brand position, awareness and loyal fan base to develop and expand our "3-fold strategy" with new games, focusing on:

Hugo branded games,
Acquired brands and content
Celebrity Brands

Utilizing Hugo as a central point of a growing narrative, we will strive to maximize profitability of coming projects by taking full advantage of Hugo's increased trans-mediation, here referring to existing games, the YouTube channel, the Hugo Movie, licensing agreements and partnerships with important endorsers. This will secure that our mobile games initially have high-quality standards individually positioned in an interesting and entertaining Hugo & Friends multiverse.

"When doing conceptual development we always analyze thoroughly on industry metrics and consumer trends. This way we ensure that we only produce highly attractive content to a market that is hungrier than ever – and that our products will have a solid root in consumer demand!"

Henrik Kølle, CEO

Hugo Games 2016 release schedule:

PRODUCT DEVELOPMENT

Street Soccer Ultimate. Q3 2016

In Ultimate Street Soccer players join up in teams and compete for rankings and prices in tournaments.

Hugo Nordic. Q4 2016

Hugo Nordic is a city builder category game, building on all our experience from Hugo World.

Hugo Nordic will take place in a world where players can build and maintain their village with different workshops, agriculture and animals while interacting with other players online.

Nyjah Huston SuperSkater (working title). Q4 2016

Featuring Nujah Huston, winner of Street League Skateboard Series in 2010, 2012 and 2014, the game will be a Street Skateboarding Game developed in cooperation with Nyjah.

Cam Newton - NFL Champion (working title). Q4 2016

Conceptual work are in progress, but featuring Amercan Football Quarterback icon, Cam Newton, the game will of course be true to Cam's sport and universe.

Fashion Fabulous (working title). Q4 2016

The player's challenge in match-3 games is to match a minimum of three similar objects while scoring points for making combinations. Match-3 is among the most popular game categories, currently dominated by King.com's Candy Crush series.

Doodle Jump 2 (working title). Q1-Q2 2017

Cooperation agreement made with Lima Sky, creator of Doodle Jump, in May 2016 regarding the development of a new mobile game combining Lima Sky's world famous mobile game IP, Doodle Jump, and Hugo Games A/S' existing Ronaldo game engine. Lima Sky and Hugo Games A/S enter into this partnership with a view to develop and distribute the new game.

Hugo Games A/S will develop the game using the Doodle Jump IP whereas Lima Sky will publish and market the game. Both parties are obliged to cross-promote the game.

Revenues from the game will be split 50/50, subject to specific provisions of recouping of cost borne by a party pursuant to the agreement. Expected release of the game in Q1–Q2 2017.

EXPANDED DISTRIBUTION

4.1.8. LICENSING & MERCHANDISING

Advertising agencies, Hollywood and the consumers have recently had a clear obsession with nostalgia, neatly emphasized by movies as Teenage Mutant Ninja Turtles, the Smurfs, Popeye, and Tintin. Nostalgia is universal, experienced across all cultures, and increases self-esteem and social connectivity, which many consumers happily want to tap into concepts they remember from the past.

This is also the reason why we are currently focusing in expanding our Hugo brand to a larger audience. Hugo as a brand possesses a unique combination of very high awareness from the TV-show and console games and present success from millions of mobile game downloads. Today, Hugo appeals to both parents and kids and his popularity expands across many generations.

Many licensing agreements are currently being negotiated with the primary purpose to increase consumer awareness towards Hugo and Hugo digital activities. Among those activities/agreements are:

Tactic: Puzzles, books and the like
Gaia Food: Cheese
Finnsweets: Sweets, Candy and Easter Eggs.
Nopa Nordic: Personal Care
Contrast: Textile
Bisca: Biscuits
Play’n Go: Online casino

EXPANDED DISTRIBUTION

THE HUGO MOVIE

In cooperation with Einstein Film and Finnish Film Company Anima Vitae, a 3D animated feature film called “HUGO – The World’s Worst Comeback” is being planned with the aim of release in 2018. Currently, Hugo Games has decided not to be involved in the production, marketing or distribution of the movie, but only to provide the Hugo license basis

Anima Vita, the production company, has been one of the leading independent animation studios in Nordic countries. Anima is best known for 3D feature Niko (2008), which was sold to 118 countries, selling more than 5 million tickets and nominated for the Best Feature at the European Film Awards. Anima has been nominated twice for the Best European Animation Producer and is, furthermore, the company behind Rovio's (Angry Bird) cartoon channel on YouTube. Einstein Film is owned by Philip Lipski Einstein who is one of the most successful marketers within the film-industry. To illustrate, Philip Einstein was overall responsible for the launch of Von Triers latest movie, "Nymphomaniac".

However, it is important to notice that the actual production of the movie is dependent on sufficient funding. This funding of the movie is in progress although there are no guarantees.

CURRENT TITLE: HUGO: THE WORLD'S WORST COMEBACK

PRODUCTION PARTNERS: EINSTEIN FILM

GENRE: COMEDY

TARGET AUDIENCE: FAMILY

FORMAT: 3D STEREO ANIMATION FEATURE, 80 MIN

STATUS: IN DEVELOPMENT

Synopsis: "Hardly anyone knows that the comically accident-prone janitor, Hugo the little troll, was once a TV star – not even his fame-obsessed daughter, Squeaky. Hugo keeps his past secret because fame never made him happy. But his latest disaster could cost him a fortune. Fortunately, all the media attention it receives persuades outrageous talent-show producer Simone to give Hugo a chance at a comeback. Unfortunately, Hugo's fame makes Simone's assistant, Fredo, so jealous he determines to destroy him – with help from giant mountain troll. How will Hugo and Squeaky, now trapped in fame, ever defeat a monster like that?"

EXPANDED DISTRIBUTION

4.1.9. GEOGRAPHICAL FOCUS

Hugo Games' market place is the global market and all games that are being published will be available from all countries over the world via Apple Store and Google Play. This has been the case since the first mobile game with Hugo was published. Hugo Retro Mania went live in all countries in the world and became the most downloaded game in e.g. Chile, Thailand, Finland, Russia, Germany and many more. The most important single countries were Denmark and Germany. For 2015, revenue totaled DKK 418,000 (2014: DKK 1,378,000) in Denmark, and DKK 593 (2014: DKK 846,000) in Germany. It is the intention that all mobile games that are being published by Hugo Games will go live on all stores in the world.

In terms of active marketing of our games in the Asian market we will initially be focusing on China, Japan and South Korea as these markets have become some of the biggest mobile gaming markets in the world (Source: SuperData).

2015 marked another year of unimaginable development for the Asia and especially the Chinese mobile gaming market. China's mobile gaming market alone has been experiencing explosive growth and is projected to overtake the US market by this year.

It is estimated China's mobile game market to grow 93% to $2.9 billion with compound annual growth of 37.6% from 2013 to 2018. In total, Asia's Big 3 (China, South Korea & Japan) will reach a market size of $12 billion – almost four times as big as the United States at $3.2 billion.

The data and illustration used in this section is based on research from research firm, Niko Partner and AppLift and New Zoo: Games Market Research

Source: Niko Partner, AppLift and New Zoo: Games Market Research

China is one of the most promising

mobile games markets in the world and is soon to overtake the US as the second largest mobile games market. Between 2013 and 2014, China's total mobile games revenue grew 86 percent to astonishing $4.25 billion (AppLift and New Zoo: Games Market Research). Monetization is still low but there is huge potential for growth, as smartphone penetration is far from reaching its momentum. The demand for smartphones is increasing, and over the past two years, smartphone shipments in China nearly quadrupled. In mobile games, the Android platform surpassed iOS in revenue terms in 2013. Thanks to the efforts of domestic manufacturers such as Xiamoi, Huawei and Lenovo, smartphones with Android systems at a low-priced level prevail in the China market.

Many Western game developers have met great challenges trying to penetrate the Chinese market. From a market perspective, there are three especially big challenges, namely, the way you promote, distribute, and monetize your products.

In terms of promotion and marketing, the standard social media channels in the West are more or less closed off or not relevant in a Chinese perspective. Foreign companies should be aware of local equivalent services such as Sina Weibo, WeChat and Youku. A feature in the Apple Store or a good ranking on Google, Facebook or Twitter is not what counts; instead it is about partnering with local search engines and local app stores.

In China, the app store market is much more fragmented than in Western Europe, and you will have to cover at least the Top 30 stores to provide $80\%$ coverage (AppLift and New Zoo: Games Market Research). You will need to work with carriers to get hold of their billing codes as carrier billing is still the most efficient solution of billing – especially within the casual type of games. In general, the freemium category often has very complex and deep economic systems.

Source: Niko Partner, AppLift and New Zoo: Games Market Research

Japan is the world's largest mobile app market in revenue as it overtook the US as the most lucrative market globally in Q3 2013. The large scale, especially, fueled by a high percentage of mobile gamers; 43 percent of the Japanese population plays mobile games, making it one of the most mobile gaming countries in the world (AppLift and New Zoo: Games Market Research) The Japanese mobile gaming market is characterized by a sizeable portion of players in the "big spender" category.

Japan has the world's highest monthly ARPPU ($50) as well as the highest average spent per monthly paying mobile gamer at $22.1 (AppLift and New Zoo: Games Market Research) More than 10 percent of Japanese paying mobile gamers spend over $25 per month, making it a highly lucrative market.

Source: Niko Partner, AppLift and New Zoo: Games Market Research

South Korea is a relatively smaller market compared to China and Japan, but it shows great potential for growth – $33\%$ year-on-year growth between 2013 and 2014 (AppLift and New Zoo: Games Market Research). South Korea has the second largest smartphone penetration and big growth potential due to its $1.8 billion online/PC gaming market. Especially noticeable is that Android makes up for a large majority and accounts for 85 percent of the installed base of operating systems through the undisputed domination of Samsung.

As also the case in Japan, traditional and offline marketing methods such as billboards and TV are a necessary part of one's marketing plan. Messaging app KakaoTalk is installed on 93 percent of smartphones and its dominance as a mobile games publishing and discoverability platforms makes a necessity for foreign publishers (AppLift and New Zoo: Games Market Research).

The illustration below shows some of the different territory KPI's for China, Japan and South Korea.

Source: Niko Partner, AppLift and New Zoo: Games Market Research

OUR STRATEGY

CRITICAL SUCCESS FACTORS

OUR PRODUCTS ARE SUFFICIENTLY SUCCESSFUL

We want to garner vital visibility and co-promotional commitments. By following market-trends and listening to distributors and end-users, we ensure that we do not develop anything in which only we believe. Our product development will always have a solid root in customer demand.

OUR PRODUCTS AREN'T "KNOCKED OFF" BY COMPETITORS

By developing widely different products on a steady base, we counterbalance the risk of missing the market totally. Developing for different entertainment platforms, e.g. Apple AppStore, Google Play, Microsoft, Facebook, Amazon, strengthens this even more.

WE DONT FALL SHORT OF HUMAN RESOURCES

We will through our current network be able to outsource parts of projects to reliable, skilled companies. However, it is a part of the company policy to keep personnel highly motivated and satisfied, knowing that this implies much more than salaries.

OUR ENDORSERS DON'T INFLUENCE US NEGATIVELY

As we work with key celebrities, their brand value may be influenced by a number of external events beyond our control, such as negative behavior during a football match or actions outside the pitch. This can immediately influence us with serious negative spillover effects

OUR STRATEGY

GOING FOR SUCCESS

Apart from the fact that our 3-fold strategy has a strong edge and creates a broad variety of products and segments, some of the most important reasons why we believe that we are headed towards for success is:

The market:
- We currently find ourselves in one of the fastest growing industries, expected to reach USD 35 billion in 2017
- We have unexploited opportunities on the global scale such as US, China and Japan.
- Mobile advertising is expected soon to overtake online advertising as the largest market.

Products:
- We produce products with a vast global reach
- We produce products with a starting point in already profitable concepts.
- We have an edge in being the first-mover in making a dedicated sport games strategy fronted by global sports stars.

Technology:
- Our own-developed back-end software, DigiStarter, allows us to scale our titles across platforms and to make real-time alterations, thus securing lower development costs and the most profitable returns.

Organization:
- We have a team of highly skilled game developers, artists and business strategists.
- We have a strong, established IP: “Hugo” and work strategically with securing relevant celebrity IP’s where concepts match.
- Our founder and CEO has worked with mobile games and the app market since 2008, with multiple successful exits (Endomondo, Pixeline/Josefine, Magnus & Myggen).

Marketing:
- We have strong relations, knowledge and experience in marketing on mobile platforms.
- We expect a large leverage through social media campaigns as we aim to cooperate with several celebrities.

4.1.10. OUR MARKETING EFFORTS

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OUR MARKETING EFFORTS

MARKETING PLAN

In the next 6 months, we are not only aiming to launch a range of new products, but also managing new and innovate merchandising agreements. We will continue to build upon Hugo's brand as well as new viable IP's and enter into extraordinary game partnerships with global celebrities - as we did with Cristiano Ronaldo. In terms of launching new games, our marketing efforts will consist mainly of in-app video advertisements and interstitials as well as using social media platforms leveraging into reaching a global audience.

ADVERTISING

EVENTS & PROMOTION

CELEBRITY ENDORSEMENTS

SOCIAL MEDIA CHANNELS

SOCIAL PUBLIC RELATIONS

OUR MARKETING EFFORTS ADVERTISING

IN-APP ADVERTISING

Incentivized videos have become increasingly popular, especially within the casual/super casual freemium genre. With incentivized videos, users watch short clips to redeem extra lives or currency within games. As the customer themselves choose to watch the videos, they are more inclined to receive messages, and research from Microsoft's ad serving company, Massive, shows that "IN-GAME ADVERTISEMENTS HAS FOUND TO INCREASE INTENT DOWNLOAD BY 24%."

IN-APP INTERSTITIALS

An interstitial advertisement provides the user with the option to close the ad and get back to the intended content. As the interstitial appears either prior to app launch, between levels or before exit, the ad's interference with the purpose is minimal. However, as the user will have to close the ad, attention for the ad is guaranteed as "82% OF USERS NOTICE THE MESSAGE OF THE ADVERTISEMENT" (Google study - The Mobile Movement: Understanding Smartphone Users), and therefore maintains high conversation rates.

FACEBOOK ADVERTISING

Video and banner images have also become a significant part of advertising on social media. FACEBOOK OFFERS A VARIETY OF VERY SPECIFIC DATA ON THE TARGET AUDIENCE, PROVIDING A VERY PRECISE AND COST-EFFECTIVE SOLUTION FOR BROAD REACH. Using social media as a marketing and advertisement platform allows for greater interaction and engagement with the audience.

CROSS-PROMOTION

Cross-promotion between our current games will become an important marketing channel in the launch of new games. WE WILL HERE BE ABLE TO REACH A BROAD MASS OF ALREADY EXISTING HUGO FANS AND AT LOW COSTS. These consumers are all willing to download new content, creating a solid DAU for future games. As our game portfolio expands, our marketing channel will grow and strengthen our communication platform for all games to come.

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OUR MARKETING EFFORTS

CELEBRITIES, EVENTS & PROMOTION

Celebrity endorsements

Brought to the forefront by A-lister, Kim Kardashian, celebrities are turning towards mobile gaming with great success. Their huge social followings, influence and involvement in promotion and game design allow for instant commercial success. Hugo Games secured one of the most influential celebrities in the world, Cristiano Ronaldo – significantly bigger on social media than Kim Kardashian and Katy Perry, with whom Glu made a licensing deal with.

The Hugo movie

The Hugo Movie, currently planned to go into production in 2017-2018, will, once finished, be promoted in collaboration between Hugo Games and movie producer Anima Vitae. The content will, with the most contemplated push, hopefully reach a large audience, which is expected to increase the awareness of the Hugo brand. The content will primarily be distributed online and social public relations initiatives will become a necessarily part of the promotion push such as:

Provide film bloggers with trailer content
Provide movie news sites with trailer content.
Submit content to movie trailer YouTube channels

Similar trailers received:

POPEYE TRAILER: +1 million views.
SPONGEBOB MOVIE: +3.8 million views.

OUR MARKETING EFFORTS

UTILIZING SOCIAL MEDIA IN A TARGETED MANNER

Our customers are social, and we are too. Currently, we have a strong Facebook presence with a primary Hugo fan page counting more than 700,000 fans and two secondary game pages for Hugo World and Hugo Troll Race. During 2016, Hugo's social eco-system is expanding in major ways. The primary objective of our marketing initiatives is to create a holistic approach consisting of social networks, video sharing, micro blogging and social public relations. We will during 2016 expand our social media portfolio with more strategic use of our Hugo YouTube channel and with a Hugo Twitter page.

Our plan includes the strategic objectives to accomplish the following social media goals:

Grow Facebook followers to reach 10 million.
Increase Hugo's YouTube channel with 500 subscribers and +2 million video views.
Develop Twitter to become a viable communications and marketing channel.
Connect to regional social media and blogging communities.

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OUR MARKETING EFFORTS

FACEBOOK

Facebook is a great tool to reach a broad audience while maintaining a degree of dialogue and credibility. As a matter of terminology, we have separated our Facebook page into one primary fan page, and, so far, two secondary game pages. The application, ambitions and assessment metrics are completely different from each other and should be considered as independent entities in a broader context.

Primary Hugo fan page

The strategic objectives of the primary fan page:

Increasingly develop the page as the heart and power of all Hugo related communication, towards establishing Hugo as a market leading IP.
To create an environment that connects old as well as new fans of the Hugo brand, striving to grow our audience to build the foundation for further global expansion.

Target within the next years

Reach 10 million followers
Post 1-3 weekly updates every week
Hold monthly competitions

Create a brand powerhouse

The vision of the fan page is to embrace nostalgia while having a forward-looking perspective. We respect Hugo’s history as a tool of generating goodwill and driving followers, but the focus is to promote Hugo the mobile Screen Troll. The primary page will connect all social media initiatives and is used as a matter of branding and expansion and as a communicative powerhouse. More specifically, in order to reach the rather ambitious goal, we will:

Share a mix of engaging content such as competitions, pictures, videos and other entertainment content, to keep fans invested in the page.
Promote current and upcoming games and other Hugo-related news.
Interact with Cristiano Ronaldo (approximately 105 million Facebook fans) to grow follower count.
Drive attention from the Hugo Movie by collaborating with the producers of the movie.
Direct players from Hugo Super Skater through in-game objectives.

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Secondary Hugo fan page

The strategic objectives of the games pages:

Support, energize and engage the audience to increase and improve the games' retention and monetization metrics.
Grow a thriving community for each of the secondary pages to increase fan involvement and continuously keeping them invested in the games.

Grow thriving communities for each game page

The secondary pages will be related to the specific games and will, therefore, be more sales-oriented. We want to grow a thriving community for each of the pages, more specifically we will:

Share a mix of engaging content such as FAQs, news and updates.
Increase user engagement through weekly competitions, special offers and rewards.
Direct players to the individual Facebook pages through in-game objectives.
Tap into our loyal fan base and energize them to become game ambassadors.

As cross-promotion between games and social media networks is a vital way for us to grow organically and with the lowest cost, the performance and reception of upcoming games will have a crucial outcome on the traffic driven to and from Facebook.

OUR MARKETING EFFORTS

You Tube

YOUTUBE

YouTube has increasingly become the most essential medium for game marketing. A 2015 research from Google shows that 95% of gamers are turning to YouTube for entertainment and information (Gamers on Youtube: Evolving Video Consumption). Especially fueled by the “let’s play” genre also game walkthroughs, trailers, reviews and tutorials generate millions of views. The trailer for Hugo Retro Mania gained 1.3 million views, clearly influencing the general performance of the game and overall the Hugo YouTube channel has had over 3.5 million views. The rapid growth of game content consumption on YouTube suggests that it has become an important medium for gamers and we will tap into this growing trend.

The Hugo YouTube Channel

The strategic objectives of the YouTube channel:

To grow the Hugo channel to become a primary branding platform, which eventually will create the best possible starting point for future game promotion, advertising and customer acquisition.
To utilize the social power of YouTube to connect with potential YouTube partners such as video bloggers and game review channels.

Developing the Hugo YouTube channel

We will reach our goal primarily by posting a mixture of what we have called foundation videos and reach videos. Reach videos are the view generators of the page, aiming to reach a broad audience. In this category are upcoming game trailers, Ronaldo & Hugo video spots and Hugo: The World’s Worst Comeback trailers.

Foundation videos are the creation of a digital library, where Hugo fans can seek out additional content such as a Hugo Safari series (previously existed as premium content) sound clips from the old games and retro video game trailers.

Connecting with video-bloggers (vloggers)

Before a game is released, fans mostly watch content released by the brand, such as game announcements, gameplay demo and launch videos. Post-release, social media users shift their attention to the game community. “Throughout a game’s lifecycle, 47% of the videos fans watch in regards to a gaming end up being community-created” (Source: Google). Half of the messages that influence our consumers come from external sources and we therefore need to connect with these opinion leaders. See the section on Social PR for concrete tactical initiatives in how we are going to connect with the community.

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OUR MARKETING EFFORTS

TWITTER

Twitter is an untapped area for Hugo Games, but it possesses a great opportunity for us to better engage with our customers, competitors, the news media and other relevant stakeholders. Whereas, our other social media channels mainly focus on the customer relations, Twitter is much more multi-faceted as relevant conversations daily flow through the platform. We need to know what not only our customers say., but also what our competitors, opinion leaders and the media are talking about and how they talk about us – proactively tapping into the conversations.

The Twitter account

Our goal with Twitter is to:

To create a viable communications platform between Hugo Games, our customers, news media outlets, the blogging community, the game industry and other relevant stakeholders
To build a strong platform that encourages direct interaction between Hugo and relevant celebrities to generate viral effects, awareness and engagement.

Establish a Hugo Twitter presence

Twitter is the fastest way to spread news and reach an untapped customer potential. Especially, as the partnership with celebrities such as Cristiano Ronaldo is catching up, we need a viable channel where we can connect with them in a more interpersonal manner.

The Twitter account will be of equal talking, listening, supporting and engaging with our customers. The objectives of Twitter are to:

Share a mix of engaging content such as competitions, pictures, videos and entertainment.
Promote content that directs traffic between the primary media channels as Facebook and YouTube.
Monitor and engage in relevant discussion about the Hugo brand.
Obtain customer feedback data.
Establish relations with bloggers, journalists and other relevant actors in the gaming industry.

4.1.11. SOCIAL PUBLIC RELATIONS

Social public relations is a new concept fueled by the emergence of the various social media platforms. Social PR is per se not to create news, but about seeding it and simulating its spread through natural, organic, personal referrals. These social public relations pieces will tie in with social media forums, opinion leaders and social bookmarks such as Digg and Reddit. Social public relations increasingly becomes a relevant marketing strategy for us when upcoming games are to be launched.

Social PR will be most relevant in the weeks up to a game release, where we will:

Update bloggers about new games and new game features.
Submit games for reviews
Submit games for bookmarking (Reddit, Stumble upon, digg)
Provide vloggers with games for gameplay videos and game reviews
Target news media through Twitter

Potential social media partners:

Fer0m0nas (YouTube: Gaming channel - 2.5 million subscribers, Twitter: 4,95 million followers, Portugal)
Pewdiepie (YouTube: Gaming channel, 33 million subscribers, Twitter: 4,95 million followers, Sweden)
Thewillyrex (YouTube: Gaming channel - 6 million subscribers, Twitter: 500k followers, Spain)
iGamesView (YouTube: Game review channel - 70k subscribers, Twitter: 4,000 followers)

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4.2 Exceptional factors

To the Company’s knowledge, information given in 4.1 has not been influenced by exceptional factors, other than that mentioned above.

4.3 IPR and material contracts

For an overview of the Company’s material contracts please refer to chapter 20. The contracts listed in chapter 20 are the only contracts as of the date of this Prospectus the Company deems itself dependent on in carrying out its current business, however the Company’s intellectual property rights also form a core asset which will prohibit competitors from using the Hugo-brand throughout the lifetime of the protection. For an overview of the Company’s intellectual property rights see chapter 9.

4.4 The basis for any statements made by the issuer regarding its competitive position

Hugo Games believes it has a repeatable and scalable game development process. The acquiring of all rights related to the character HUGO in 2011 and the agreement with Cristiano Ronaldo, Nyjah Huston and Cam Newton, which all have a high awareness in multiple countries, gives the Company a significant opportunity in the mobile games industry. Having learned from the initial Ronaldo release in 2015, which failed in terms of expectations, Hugo Games is confident that the next Ronaldo release will succeed in terms of users, retention and revenues.

Hugo Games has previously introduced games on App Store and Google Play, which, without any advertisement effort, have reached millions of downloads. The Company believes the inherent social nature of their games; their marketing processes and the brand awareness of both the HUGO character and the football player Cristiano Ronaldo as well as the company’s three-fold strategy are key competitive advantages.

5. ORGANIZATIONAL STRUCTURE

The organization structure of Hugo is as follows:

Hugo Games A/S is the parent company of Hugo Games Development ApS and Ivanoff Interactive A/S, both of which are $100\%$ owned and controlled.

6. PROPERTY, PLANTS AND EQUIPMENT

Environmental issues

There are currently no known environmental issues that may affect the Company's utilization of the tangible fixed assets.

7. OPERATING AND FINANCIAL REVIEW

Not applicable. Reference is made to appendix 2 and 3.

8. CAPITAL RESOURCES

8.1 The Company's capital resources

The Company had an equity ratio of $80.7\%$ out of total assets DKK 59.8 million as per 31 March 2016.

Cash in the Company was DKK 7.5 million as of 31 March 2016. The Company had DKK 7.0 million in current liabilities (payables to credit institutions of DKK 1.9 million, trade payables of DKK 3.2 million and other debt of DKK 1.9 million). Non-current liabilities amounted to a total of DKK 4.6 million, of which DKK 4.6 million was debt to credit institutions and DKK 0.0 million was provisions for deferred tax.

Debt to credit institutions is loan provided by the Danish Vækstfonden/Danish Growth Fund. The loan was entered into on 2 July 2014 with the first down payment took place 1 July 2015 and the last down payment in 2019. The Company has no covenants related to any of its debt.

The Company manages its liquidity in order to cover i.e. operational expenses. It is the goal of the Company that cash generated by operations combined with equity raised in the capital markets and/or bank loans shall be the primary source for funding. Loans will primarily be made in local currency. Any excess cash generated by the Company or raised through the equity markets are placed as bank deposits. The Company does not, as of the date of this Prospectus, invest in any bond loans or similar. The Company currently has no existing borrowing requirements.

The table below lists the Group's current capitalization and indebtedness. The figures as of 31.03.2016 are derived from the last financial statement as per 31.03.2016).

Huge Games A/S - Consolidated figures	31.03.2016	Changes since end-Q1**	Date of Prospectus
DKK 1000
CAPITALISATION
Total current debt
Guaranteed
Secured*	1667	-	1667
Unguaranteed / unsecured	5 095	-	5 095
Total Current debt	6 962	-	6 962

Total non-current debt
Guaranteed
Secured*	4 586	-463	4 103
Unguaranteed / unsecured	4	-4	-
Total non-current debt	4 990	-467	4 103

Total debt (a)	11 552	-467	11 680

Shareholder's equity
Share Capital	12 637	-	12 637
Legal reserve	-	-	-
Other reserves	35 052	-3 190	32 462
Total shareholder's equity (b)	46 299	-3 190	45 098

Total Capitalisation (a+b)	59 841	-3 657	56 164

The secured debt totalling DKK 6.5 million is debt to Vækstfonden. As security for the loan a collateral of DKK 7.5 million has been agreed on intangible and tangible assets as well as receivables with a total book value of DKK 604 as of 31.3.2016. DKK 6.5 million of the secured debt is also guaranteed by the Company's largest shareholder Aula Holding ApS (100 controlled by CEO Henrik Kølle). *Changes have not been audited or reviewed.

Huge Games A/S - Consolidated figures	31.03.2016	Changes since end-Q1**	Date of Prospectus
DKK 1000
INDEBTEDNESS
(A) Cash	7 461	-6 461	1000
(B) Cash equivalents	-	-	-
(C) Trading securities	-	-	-
(D) Total liquidity (A + B + C)	7 461	-6 461	1000

(E) Current financial receivables	-	-	-
(F) Current bank debt	-	-	-
(G) Current portion of non-current debt	1867	-	1867
(H) Other current financial debt	5 095	-	5 095
(I) Current financial debt (F + G + H)	6 962	-	6 962

(J) Net current financial indebtedness (I - E - D)	-499	6 461	5 962

(K) Non-current bank loans	-	-	-
(L) Bonds Issued	-	-	-
(M) Other non-current loans	4 590	-459	4 101
(N) Non-current financial indebtedness (K + L + M)	4 590	-459	4 101

(O) Net financial indebtedness (J + N)	4 091	6 002	10 093

There have not been any significant changes to the Group's financial or trading position subsequent to the end of Q1 2016, except for the reduction in cash of DKK 6.5 million and shareholder loan of DKK 2.0 million related to development of games, and up-front payments related to recently signed strategic agreements, the down-payment of DKK 0.5 million in secured debt and the reduction of other reserves of DKK 3.2 million.

8.2 Narrative description of the Company's cash flows

The table below lists the Company's cash flows for the period 2014 through 2015 – all according to IFRS.

Hugo Games A/S

DKK 1000	IFSR	IFSR	IFSR	IFSR
Consolidated cash flow statement	Limited review	Limited review	Audited	Audited
	31.03.2016	31.03.2015	31.12.2015	31.12.2014
Cash flow from operating activities
Total comprehensive income before tax	-6,004	-4,092	-37,122	-5,028
Deprecations and amortisation	2,668	938	11,404	3,496
Interest payments etc..	14	134	242	260
Change in working capital	650	2,339	1,053	-2,116
Taxes	0	0	66	0
Net Cash flow from operating activities	-2,672	-681	-24,357	-3,388
Cash flow from investment activities
Net investments intangible assets	-4,959	-4,659	-17,459	-12,778
Net investments tangible assets	0	0	-64	-16
Net investments financial assets	0	0	12	-20
Net cash flow from investment activities	-4,959	-4,659	-17,511	-12,814
Cash flow from financial activities
Share capital increase	950	5,750	38,863	14,906
Sale of treasury shares	0	0	5,749	0
Loan to credit institutions	-452	-107	-807	7,308
Loan from associated companies	0	0	699	5,856
Net cash flow from financial activities	498	5,643	44,504	28,070
Net charge in cash and cash equivalents	-7,133	303	2,636	11,868
Cash position at beginning of period	14,594	11,958	11,958	90
Cash position end of period	7,461	12,261	14,594	11,958

In 2014 the cash flow from operating activities was DKK -3.4 million, cash flow from investing activities was DKK -12.8 million and cash flow from financial activities amounted to DKK 28.1 million. Cash end-of-year 2014 was DKK 12.0 million.

In 2015 the cash flow from operations was DKK -24.3 million, compared to DKK -3.4 million in 2014, mainly due to increased marketing costs as well as costs related to the Official Listing and initial public offering of the Company. Cash flow from investing activities amounted to DKK -17.5 million compared to DKK -12.8 million in 2014 relating to development projects carried out by Hugo Games. The figures represent both completed and non-completed development projects carried out by Hugo Games Cash flow from financial activities was DKK 44.5 million in 2015 compared to DKK 2014 28.1 million, the main difference relating to the IPO by the Company. Total cash flow in 2015 was DKK 2.6 million compared to DKK 11.9 million in 2014. Total cash end of 2015 was DKK 14.6 million compared to DKK 12.0 million in 2014.

In Q1 2016 the cash flow from operations was DKK -2.7 million, compared to DKK -0.7 million in Q1 2015, mainly due to increased activity in the Company. Cash flow from investing activities amounted to DKK -4.9 million compared to DKK -4.7 million in Q1 2015 relating to development projects carried out by Hugo Games.

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Cash flow from financial activities was DKK 0.5 million in Q1 2016 compared to DKK Q1 2015 5.7 million, the main difference relating to the sale of treasury shares by the Company in Q1 2014. Total cash flow in Q1 2016 was DKK -7.1 million compared to DKK 0.3 million in Q1 2015. Total cash end of Q1 2016 was DKK 7.5 million compared to DKK 12.2 million in Q1 2014.

8.3 Restrictions on the use of capital

As of the date of the Prospectus, the Company does not have any overdraft facilities or restrictions on the use of capital, neither exists any collateral on the capital of the Company.

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9. RESEARCH AND DEVELOPMENT, IPR AND LICENCES

Research and development (R&D)

Development costs related to new products are capitalized as intangible non-current assets. Development costs include external assistance and internal costs if they can be measured reliably. When the game is launched publicly, depreciation starts and are calculated over a period of 3-5 years depending on whether the game is released as a soft launch (5 years) where major features is planned to be released later or it is hard launched (3 years) with all major features released at the same time.

Below is the research and development expenses incurred from 2014 to Q1 2015.

DKK million	2014 (audited)	2015 (audited)	Q1 2016
Research and development	13	17	5

R&D expenses in 2014

Expenses related to research and development totaled DKK 13 million in 2014. These were related to development of five games and general efficiency-developing tools and programs making future game development more efficient.

R&D expenses in 2015

Expenses related to research and development totaled DKK 17.5 million in 2015, compared to DKK 12.8 million in 2014. These were related to development of seven games in 2015 and four games in 2014 as well as general efficiency-developing tools and programs making future game development more efficient.

R&D expenses in Q1 2016

Expenses related to research and development totaled DKK 5.0 million in Q1 2016, compared to DKK 4.7 million in Q1 2015. These were related to development of six games in Q1 2016 and seven games in Q1 2015

Intellectual Property Rights- IPR- and licenses

The Group's intellectual property strategy involves the protection of the HUGO-trademark in various countries and especially countries in which HUGO has a significant awareness profile. All trademarks and copyright to HUGO were transferred to the Company in 2012. The Company does not have any patent protection,

Sandel, Løje & Partnere (previously Sandel, Løje & Wallberg and before that Jette Sandel Trademarks) have been overall responsible for the protection of the HUGO trademarks since the late nineties. Sandel, Løje & Partnere has delivered a legal opinion regarding the Company's intellectual property rights. The following is based on this legal opinion.

Hugo Games Development ApS (fully owned by the Company) is the effective owner of registered trademark rights in various versions of the HUGO character and name, rights which largely cover the relevant goods and services, i.e. computer and videogames, games for mobile phones and the like, and are valid for a wide geographic area, covering markets/jurisdiction normally considered to be the most relevant.

The Company has via Hugo Games Development ApS presently registered several HUGO-related trademarks around the world, among others in Denmark, Norway, EU, China, Argentina, Brazil, Chile, Thailand, Turkey, Australia, Russia, Germany and Vietnam, mainly regarding the word/device mark HUGO (in classes 09, 16, 21, 28, 30, 38, 41) and the troll character (in classes 09, 28, 41).

In Denmark and most common law countries, where products bearing the HUGO trademark(s) have been sold/marketed, Hugo Games Development ApS has obtained use-based, enforceable trademark rights in relation to the goods for which the mark is used/has been continuously used, i.e. primarily computer games. Such use based

trademark rights may be invoked against infringing third parties in the same way as registered trademark rights, provided that evidence of such use is available and subject to rules of the country in question.

On behalf of the Company and Hugo Games development ApS, Sandel, Løje & Partnere maintain a worldwide trademark watch of the word HUGO (in classes 09, 16, 21, 28, 30, 38, 41) as well as of the troll character (in classes 09, 28, 41). Possibly conflicting marks are reported to the Company and Hugo Games Development ApS and action taken where relevant and necessary, primarily through filing of trademark oppositions. The Company and Hugo Games Development ApS has a procedure in place for removing infringing material on various internet platforms and mobile platforms and has successfully removed material particularly from Google® Play platforms. The Company continues to pursue such infringements as they occur and are discovered.

For a description of the different classes, please see below:

Class 9 includes, in particular apparatus and all computer programs and software regardless of recording media or means of dissemination, that is, software recorded on magnetic media or downloaded from a remote computer network.
Class 16 includes mainly paper and goods made from that material and office requisites.
Class 28 includes mainly games and playthings; gymnastic and sporting articles not included in other classes.
Class 30 includes mainly foodstuffs of plant origin prepared for consumption or conservation as well as auxiliaries intended for the improvement of the flavor of food.
Class 38 includes mainly services allowing at least one person to communicate with another by a sensory means. Such services include those which: 1. allow one person to talk to another, 2. transmit messages from one person to another, and 3. place a person in oral or visual communication with another (radio and television).
Class 41 covers mainly services rendered by persons or institutions in the development of the mental faculties of persons or animals, as well as services intended to entertain or to engage the attention.

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10. TREND INFORMATION

The Company believes the following are some of the most significant trends reasonably likely to affect the Company and/or its business model in the current and subsequent financial years::

The growth of the mobile games continues

Global games revenues are forecasted to reach USD 102.9 billion in 2017, rising at a CAGR (compound annual growth rate) of 21.96% with China, Europe, Japan and the US as key markets. However, as rising smartphone ownership is increasing globally, mobile games will reach further than ever before.

Mobile games will dominate app stores

Games are responsible for the majority of downloads and revenues in app stores. Apple App Store reports that 79% of all revenues are gained from games and at Google Play the figures are 92% (Apple App Store, Google Play). However, as the mobile games market matures, thousands of game develops compete, raising both the potential pay-offs and stakes.

Mobile advertising will surpass online

It is expected that by 2017, mobile in-app advertising revenue will surpass online advertising.

The growing adoption and increasing revenue per device will attract mobile app publishers in the years to come. Across the globe, advertisers spent USD 64 billion on mobile in 2015, an increase of nearly 60% over 2014 (AppAnnie)

APAC on the rise

2015 marked another year of unimaginable growth in the Asia Pacific mobile gaming market. The digital game industry is expected to grow to 57.7 billion in 2020 with China driving more than half the revenue. (AppAnnie).

Casual gaming will continue to dominate

Over the course of the past year, numerous new market trends arose, but most prominently stand the emergence of "super casual gaming" games that require little or no time to understand, learn and to play. A game can be started and completed within minutes and provide go-to entertainment whenever there are few spare minutes available. It is within the super casual genre we will target the majority of the 2016 Hugo games catalogue.

Today, everyone is a gamer

The social stigma having surrounded the gaming community is now gone. Games are not only limited to a subgroup of tech-savvy teenagers, but they are now reaching a larger and more diverse audience. As services and devices target mainstream audiences, games are appearing in variety of forms, catering all groups of society.

The above mentioned growth of mobile devices and increased turnover from mobile games entail great opportunities for Hugo Games both in terms of market size and turnover. As digital distribution overcomes most geographical barriers, it has enabled us to reach a much larger and broader audience from all around the world.

A mobile gaming market with strong growth across user segments and geographies is reflected in increased expected turnover and profit over time. The growth in advertisers' spending on mobile advertisement is likewise reflected in increased expected revenue growth from advertisements. The trend and expectation that casual games will continue to dominate the mobile gaming market is also an advantage for Hugo Games as we predominately publishes casual games in this genre.

However, as regards the above trends, the correlation is not one-to-one and games published by Hugo Games can experience different trend rates than the market trends. Many factors impact the performance of mobile games and factors like audience reception, relationship with Apple/Google, and business model implementation can affect the overall performance.

We will in the following pages elaborate some of the key trends described above.

China on the rise

Our latest figures for worldwide mobile ad spending are higher than previous forecasts, due to faster- than-expected growth in China's mobile ad market. According to our newest data, marketers will spend 24.99 billion USD on mobile advertising in China alone in 2016 – up from 15.82 billion USD last year (source: eMarketer). China will, therefore, soon surpass both the UK and Japan to become the second-largest mobile ad market in the world. As shown and documented, mobile advertising is not only already one of the biggest and most prominent resources for marketers across the globe, but the field is experiencing strong growth numbers, eventually making mobile the biggest advertising genre in 2017.

The growth of the mobile games and the segment of players continues

There is no doubt that the global market trends are in Hugo Games' favor. According to the market research company AppAnnie, the global mobile games market will grow to USD 51 billion in 2016 and exceed USD 101 billion in 2020. The growth is fueled by an increase in the number of players, payers as well as higher averages spend per paying mobile gamer. The tablet games market will show $400\%$ growth until 2016. 966 million, or $78\%$ of all 1.2 billion gamers worldwide play mobile games and 368 million consumers worldwide, or $38\%$ of all mobile gamers, spend a monthly average of USD 2.78 dollars on or in mobile games (NewsZoo). By end 2016, these figures will amount to, respectively, $50\%$ and USD 3.07 dollars.

Source: SuperData and NewZoo

According to Superdata Research, the mobile app game market generated more than USD 26,2 billion in worldwide revenues in 2015. Mobile games have become one of the most important digital platforms for gamers and publishers alike and today as mobile games account for over one-third of monthly spending among digital gamers in the United States alone.

According to market research company, NewZoo, the 2014 the global games market will surpass the USD 100 billion mark within the next three years to reach USD 102.9 billion by 2017. This represents a compound annual growth rate (CAGR) of +8.1%, outstripping previous years' estimates due to the relentless growth of Asian markets. The market for smartphone and tablets will rise from USD 17.7 billion (a total market share of 23% in 2013) to an impressive USD 35.4 billion in 2017 – ultimately dominating one third of the global games market.

Worldwide Mobile Gaming Revenues 2014-2017E

In the United States, the total spending on mobile games reached USD 3 billion in 2015, up 16.5% from 2014 (eMarketer). In Europe mobile gaming revenues is estimated to reach more than USD 5.6 billion in 2017. Mobile F2P (Free to Play) gaming revenues in Eastern Europe alone is expected to generate USD 908 million (NewZoo).

2015 marked another year of unimaginable development for Asia and especially the Chinese mobile gaming market. China's mobile gaming market alone has been experiencing explosive growth and is projected to soon overtake the US market. It is estimated China's mobile game market to grow 93% to USD 2.9 billion with compound annual growth of 37.6% from 2013 to 2018 (NewZoo). Japanese mobile game revenues beat expectations, driven by higher growth of app store revenues, as well as the continued popularity of mobile web games and feature phone games. In total, Asia's Big 3 (China, South Korea & Japan) will reach a market size of USD 12 billion – almost four times as big as the United States at USD 3.2 billion.

Gaming dominates the app stores

The share of total app store revenues by games is increasing year by year. In the Apple app store, 79% of all revenue is gained from games and in Google Play the figures are 92% (based on top grossing app store rankings from Apple and Google). Further, the top-tier mobile games grossed a higher share of the total app store revenues than anticipated, confirmed by public reports of game publishers King, SuperCell and Gung-ho.

Investments and M&A

The Mobile Games sector delivered more than USD 18 billion total exits in the 12 months to Q3 2014 making it the second best mobile Internet sector only surpassed by Mobile Messaging (USD 25,8 Billion (or only USD 4 billion excluding WhatsApp)).

Mobile growth exit returns

Mobile Games came in fifth best category in terms of 3 years exit return to Q3 2014 with a $9.9\mathrm{x}$ investment. The four best categories were Navigation (15.6x), Messaging (15.4x (or 2.7x excluding WhatsApp), Social networking (15x) and Lifestyle (11.4x).

Mobile Internet Trade Exits & IPOs

Average Growth Equity Exit Returns on investment to Q3 1014

Source: Digi-capital

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SPOT ON THE ADVERTISING

This year's Super Bowl featured commercials from Machine Zones, Mobile Strike featured action star Arnold Schwarzenegger and has been seen more than 30 million times on Mobile Strike's YouTube channel. As the industry is becoming more established, the opportunity for advertisers to seize this prominent audience potential is more evident than ever.

Mobile marketing

Historically, the metric most marketers have used to judge the popularity of an app is the number of downloads. However, as time spent in apps improve across all categories, it is clear that the small screen offers additional opportunities for increased engagement, greater interaction and an ability to create engaging and dynamic advertisement content. 2014 has proven that the definition of success for an app lies in its ability to create engaging, dynamic experiences that prioritizes ongoing value.

In a world where everything is becoming digital, marketers and media companies face the challenge of staying present and relevant across an ever-expanding array of devices, platforms and brand touch points, why they need to adapt to the shifted reality of the mobile-enabled, always-on consumer. Mobile advertisements offer a unique opportunity to reach customers in their secure environment and often in agreeable conditions, speaking to a heightened rate of attention and openness towards messages.

Mobile advertising revenues

2014 was the year that marketers began to understand the full potential of mobile advertising.

> “IT IS EXPECTED THAT BY 2017, MOBILE IN-APP ADVERTISING REVENUES WILL SURPASS ONLINE ADVERTISING, WHICH HAS BEEN THE DARLING OF MARKETERS FOR YEARS”

Source: AppAnnie & IDC Research

According to new figures from eMarketer the global mobile advertising market is expected to hit two significant milestones in 2016: surpassing $100 billion in spending and accounting for more than 50% of all digital ad expenditure for the first time.

The $100 billion estimated to be spent on ads served to mobile phones and tablets worldwide next year represents a nearly 430% increase from 2013. The figures further shows that between 2016 and 2019 mobile ad spending will nearly double, hitting $195.55 billion to account for 70.1% of digital ad spend as well as over one-quarter of total media ad spending globally.

Not surprisingly, growth in mobile ad spending is being driven by consumer adoption of mobile devices. Next year, eMarketer estimates, there will be more than 2 billion smartphone users worldwide, over one-quarter of whom will live in China alone. Especially there and in other emerging and developing markets, many consumers are accessing the internet mobile-first and mobile-only, so leading advertisers allocate their digital expenditure to mobile accordingly.

The number of tablet users worldwide, while growing more slowly than the smartphone audience, is still expected by eMarketer to eclipse 1 billion in 2015. The proliferation of these mobile devices across the world is driving the shift in advertising from the desktop to reach these untethered, always-on consumers.

According to research conducted by AppAnnie and IDC, mobile in-app advertising revenue will pass PC online display advertising revenue by 2017. The growing adoption and increasing revenue per device will increase the opportunity for mobile app publishers in the years to come. Research has proven the importance of mobile advertising; 82% of users notice mobile ads (source: Google); 67% of people have visited an advertisers' website

after seeing a mobile ad (Super Monitoring); and In-game advertising has found to increase intent purchase by 24%, brand recommendations by 23% and overall brand rating by 32% (source: Microsoft).

Mobile advertising spending

Research shows that marketers, on a global scale, are significantly increasing their attention towards mobile marketing as 34% reported an expected significant increase while 42% reported some increase, clearly outplaying all other marketing channels (eMarketer).

Source: eMarketer

Projected Budget Changes in 2015 According to Marketers Worldwide (by channel)

According to eMarketer, across the globe, advertisers spent more than 68 billion USD on mobile advertising in 2015. Every single relevant market for Hugo Games is expected to heavily increase their mobile ad spending towards the year 2018 (eMarketer). Currently, the top five spenders in each advertising category – total paid media, digital and mobile – are the US, China, Japan, Germany and the UK. While the UK lags behind Japan and Germany in total media spending, its digital ad market outpaces both within digital and mobile ads (eMarketer).

> "ADVERTISERS WILL IN 2015 SPEND 64.25 BILLION USD WORLDWIDE ON MOBILE - AN INCREASE OF NEARLY 60% OVER 2014. THIS NUMBER WILL REACH AN ASTONISHING 158.55 BILLION USD BY 2018, THEN MOBILE WILL ACCOUNT FOR 22.3% OF TOTAL ADVERTISING SPENDING WORLDWIDE."

Source: eMarketer

Mobile advertising is the key driver of growth around the world, and advertisers will in 2016 spend 101.37 billion USD worldwide on mobile – an increase of nearly 50% over 2015 (eMarketer). This figure will reach an astonishing 166.63 billion USD by 2018, a time where mobile advertisements will account for 22.3% of total advertising spending worldwide (eMarketer).

Total digital advertising spending

Total digital advertising spending across the globe, advertisers spent more than 150 billion USD on digital advertising in 2015. Every single relevant market for Hugo Games is expected to heavily increase their mobile ad spending towards the year 2018.

Source: eMarketer

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11. PROFIT FORECASTS OR ESTIMATES

Hugo Games A/S released financial guidance for 2016 in its annual report for 2015 on certain key figures as set out below. These figures were reiterated in the Company's Q1 2016 report:

Gross profit is expected to be in the range from DKK 20 million to DKK 25 million
EBITDA is expected to be in the range from DKK 3.0 million to DKK 7.0 million

Assumptions to the financial guidance that can be influenced by the Company or its supervisory bodies:

The Company has assumed a total of nine new game releases in 2016 and that certain revenues will be received from all of these games in 2016
Although the company has set out a certain target for number of releases in 2016, there will be a risk of delays in global release and as such these delays may affect the financial result in a negative way.
The numerous game releases leads to an assumption of significant growth in Daily Active Users (DAU) and Average Revenue per Active Daily User (ARPDAU) adding up to the expected development in Gross profit.
In the industry the Company operates within, an important part of generating downloads and new users as well as maintaining and monetizing on existing users is the marketing effort spent on the respective games. The Company has decided to employ a relatively defensive approach on the marketing of existing and new games, however the marketing effort will differ from game to game.
At any stage, the company will prioritize the pipeline of games in consideration of the long-term best value and pay-off for the company.
The identified uncertainty in EBITDA is highly related to the uncertainty in gross profit as most of the cost is fixed.

Assumptions to the financial guidance that cannot be influenced by the Company or its supervisory bodies:

The success of the Company's current and upcoming portfolio of games will be dependent on the speed of acknowledgement of the games, user feedback and metrics on the games being in soft launch

Definitions

Gross profit – Revenue after deduction for commission to app stores e.g. iTunes and Google Play

EBITDA – Earnings before interests, taxes, depreciation and amortizations

DAU – Daily Active Users

ARPDAU – Average Revenue Per Active Daily User

The Company has chosen not to issue guidance on its profit before tax, because EBITDA is a more relevant result level for measuring the performance of the Company's ability to create positive cash flow.

The basis of accounting used for the forecast is consistent with the accounting policies of the issuer.

Based on the above, the Company has set out the following financial guidance for the year 2016

Gross profit is expected to be in the range from DKK 20 million to DKK 25 million
EBITDA is expected to be in the range from DKK 3.0 million to DKK 7.0 million

Opinion of the Company's auditor

As further set out in appendix 5 and in the opinion of the Company's auditor, the above financial guidance has been properly compiled on the basis stated and the basis of accounting used for the forecast is consistent with the accounting policies of the issuer.

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12. MANAGEMENT AND SUPERVISORY BODIES

12.1 Executive management, and supervisory bodies

Below follow details of each person in the management and the Board of Directors of the Company.

Executive management

Henrik Kølle, CEO, Hugo Games A/S, Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark

Mr. Kølle holds a cand.merc/master degree in business, management and finance from the Copenhagen Business School. He has held several leading management positions, including as CEO of Plandent A/S (Denmarks leading dental company) from 1999 up until the company was sold to Planmeca Oy in 2007 and as founder and CEO of KREA Medie A/S (owner of the local game characters Pixeline and Josefine) which was sold to Egmont in 2012. Mr. Kølle has also held multiple board positions, most recently as invester and board member of the fitness app Endomondo which was sold to Under Armour in January 2015 for USD 85m.

Current directorships/partnerships:

Aula Holding ApS (CEO), Hugo Games Development (CEO), Hugo Games A/S (CEO), Ivanoff Interactive A/S (CEO and board), 4 Time Power ApS (CEO), Aula Holding II ApS (CEO), Aula Holding IV ApS (CEO and chairman), Dentalteamet Holding A/S (chairman)

Previous directorships/partnerships last 5 years:

Oliver’s Petfood Global A/S (board and CEO), Einstein Film ApS (board), Endomondo ApS (board), Anpartsselskabet af 22. April 2014 (board and chairman), Hugo Games A/S (board), 4 Time Power ApS (board), Aula Holding II ApS (board), Oliver’s Petfood A/S (Board member), Dentalteamet 101 ApS (Ceo)

Peter Ekman, CFO, Hugo Games A/S, Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark

Mr. Ekman is a state authorized public accountant in Denmark and furthermore holds a cand.merc/masters’ degree in business finance and accounting from Aarhus Business School. Mr. Ekman acted as an auditor in the period 1980 through 1995. After that, Mr. Ekman was the CEO and owner of a distributor company Wallmann A/S until the company was sold in 2006. Throughout the period 2007-2012 he was the CFO of KREA Medie A/S and has since then acted as the CFO of Hugo Games A/S, in addition to holding multiple board memberships.

Current directorships/partnerships:

Hugo Games A/S (CFO), Ekman Holding ApS (manager), Storkesiggård v/k Elmquist & P Ekman Jørgensen (partner), Deca A/S (board member), Storkesig ApS (manager), Inhope ApS (manager), Ingv. Michelsen A/S (bord member), Intoy A/S (chairman), Storkesiggård (Owner)

Previous directorships/partnerships last 5 years:

Sebbe Consult ApS (chairman), Edutoy Holding ApS (board member), Intoy A/S (manager). Selskabet af 1. Marts 2011 A/S (board member). Ingv. Michelsen A/S (chairman), Intoy A/S (board member)

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The Board of Directors of Hugo Games A/S

Bertel David Maigaard, chairman, Hugo Games A/S, Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark

Bertel David Maigaard is the chairman of Hugo Games and holds a bachelor of economics from the Copenhagen University. He has held positions such as senior associate in Advizer, head of business development and business controlling at Birger Et Mikkelsen as well as being CFO in the same company. Mr. Maigaard furthers holds a directorship position in Greystone Capital. His primary skills relates to strategy and valuation as well as business development and M&A.

Current directorships/partnerships:
Hugo Games A/S (chairman), We Do Strategy ApS (management), PAW Capital ApS (board and management) and Eurolotteries ApS (management), Dam & Maigaard I/S (partner), Claire Group A/S, (board) Maigaard & Molbech ApS (CEO), Aula Holding IV ApS

Previous directorships/partnerships last 5 years:
Oliver’s Petfood Global A/S (board), Progressive A/S (board), Datatech A/S (board), Oliver’s petfood A/S (board) Anpartsselskabet af 22. April 2014 (board and management) and Greypro Holding A/S (board and management).

Caspar Rose, vice-chairman, Hugo Games A/S, Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark

Caspar Rose is professor at Copenhagen Business School (CBS), Department of International Economics and Management. He specializes in corporate governance, stock markets, M&A’s as well as company law/securities regulation. He holds a master degree in law (cand.jur.) from University of Copenhagen as well as a master degree in finance and accountancy (cand.merc.) from Copenhagen Business School. He obtained his Ph.D. from Department of Finance at CBS. Caspar Rose has taught MBA classes for several years, but most of his current teaching is now at the CBS Board Executive Programme. Caspar Rose has also substantial practical experience from the private sector since he has worked in both Dansk Industri as legal advisor and in Danske Bank as chief analyst. He has also served as special free-lance consultant for several large and medium sized companies. He is member of the board in GF Storkøbenhavn (insurance company).

Current directorships/partnerships:
Hugo Games A/S (vice-chairman), GF Storkøbenhavn (vice-chairman), GF Forsikring A/S (board), GF Medlemsskabet A/S ( board), Crowdbanker A/S (board member).

Previous directorships/partnerships last 5 years:
Pallas Care ApS (chairman), Pallas International APS (chairman), Pallas Informatik Holding ApS (chairman), Allerød Stationsvej 2D ApS, HeyStock ApS, (board member)

Christian Sand Kirk, board member, Hugo Games A/S, Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark

Christian Sand Kirk has served on the Company’s Board since September 2014. Christian has a broad professional background within the financial sector – the knowledge and experience has been built over the last 26 years where Christian has taken up positions in London, Luxembourg and Copenhagen. Main area has been within the financial market, investment area as well as Private Banking. Christian holds an Executive Master degree from SIMI Copenhagen Business School and a Bachelor in Finance as well as a Bachelor in Organization and Leadership from Copenhagen Business School.

Current directorships/partnerships:
Hugo Games A/S (board member), C.S. Kirk ApS (owner),

Previous directorships/partnerships last 5 years:
Hugo Newhold ApS (chairman).

Rasmus Lund, board member, Hugo Games A/S, Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark
Mr. Lund is Cand. Jur. from Copenhagen University, 1999 and acting as attorney-at-law for the Group and since February 2015 also as board member in Hugo Games A/S. He is equity partner with DELACOUR Law Firm in Copenhagen. Mr. Lund specializes in corporate and commercial contracts, especially within IT and life sciences sectors in the Nordic region, both in relation to venture companies and multinational corporations.

Current directorships/partnerships:
Hugo Games A/S (board member), Persona A/S (board member), Ivanoff Interactive A/S (board member), Delacour Advokatpartnerselskab (partner).

Previous directorships/partnerships last 5 years:
Mungo Park Bureau ApS (board member), MAQS Advokatpartnerselskab (partner and board member), Nordia Advokatfirma I/S (partner), NJORD Advokatpartnerselskab (partner).

There is no family relationship between any of the persons listed above.

During the last five years preceding the date of this Prospectus, no member of the Board of Directors or the management has:

any convictions in relation to indictable offences or convictions in relation to fraudulent offences;
received any official public incrimination and/or sanctions by any statutory or regulatory authorities (including designated professional bodies) or ever been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company;
been declared bankrupt or been associated with any bankruptcy, receivership or liquidation in his capacity as a member of the administrative, management, board of directors, supervisory body or founder of a company.

12.2 Conflicts of interest

None of the persons referred to in section 12.1 of the Prospectus have any potential conflicts of interests between their duties towards the Company and their private interests or other duties.

The board members were originally elected by the two major shareholders at the time of the first election. However, following the Company's listing on Oslo Axess, the entire board has been up for re-election and elected by the shareholders at the Company's annual general meeting.

To the knowledge of the Company, none of the other persons referred to in section 14.1 of the Prospectus have been elected to their position due to an arrangement or understanding with major shareholders, customers, suppliers or others.

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13. REMUNERATION AND BENEFITS

13.1 Remuneration to Board Members and Executive Management in 2015/2016

The amount of remuneration expected to be paid to board members and executive management in 2016 is listed in the table below. For details on remunerations on the current board/management paid in 2015, please see t below.

The amount of remuneration for 2015:

Name	Position	Salary/fee in 2015 (DKK)	Other benefits in 2015 (DKK)	Pension costs in 2016 (DKK)
Bertel David Maigaard	Chairman	240,000	-	-
Caspar Rose	Vice-Chairman	120,000	-	-
Christian Sand Kirk	Board member	60,000	-	-
Rasmus Lund	Board member	60,000	-	-
Henrik Kølle	CEO	1,289,000	-	-
Peter Ekman*	CFO	523,000	336,000	58,000

*Peter Ekman has previously worked as consultant until 31 March 2015. From 1 April 2015 he was employed directly by Hugo Games A/S.

Besides ordinary remuneration to Board Members and Executive Management the following amounts were paid remuneration related to IPO assistance to Bertel David Maigaard DKK 515,000, Christian Sand Kirk DKK 344,000, Rasmus Lund DKK 422,000 and Henrik Kølle DKK 2,785,000.

Name	Position	Salary/fee in 2016 (DKK)	Other benefits in 2016 (DKK)	Pension costs in 2016 (DKK)
Bertel David Maigaard	Chairman	240,000	-	-
Caspar Rose	Vice-Chairman	120,000	-	-
Christian Sand Kirk	Board member	60,000	-	-
Rasmus Lund	Board member	60,000	-	-
Henrik Kølle	CEO	1,103,000	0	0
Peter Ekman*	CFO	768,000	0	94,000

Henrik Kølle currently has one bonus agreement relating to the realized annual EBITDA-result of Hugo Games compared to the Company’s internally approved budgets.

Other than the above remuneration agreements and as set out in section 15.3 of the Prospectus, there does not exist any other compensation agreements (share option plans, bonus or profit sharing plans or similar) in the Company or its subsidiaries.

13.2 Amounts set aside to provide pensions or similar benefits

In 2015 a total of approximately DKK 455,000 were set aside to pension fund to provide pension, retirement or similar benefits.

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14. BOARD PRACTICES

14.1 Date of expiration of the term of office for the current Board of Directors of the Company

Name	Function	Served since	Term expires
Board of Directors
Bertel David Maigaard	Chairman	9 September 2014	Annual general meeting 2017
Caspar Rose	Vice-Chairman	6 February 2015	Annual general meeting 2017
Christian Sand Kirk	Board member	9 September 2014	Annual general meeting 2017
Rasmus Lund	Board member	6 February 2015	Annual general meeting 2017

14.2 Service contracts providing benefits upon termination of employment

Henrik Kølle, CEO, is entitled to a severance pay equivalent to 12 months' salary (excluding bonus) if the position is terminated and such termination is not caused by the CEO. None of the other members of the administrative, management or supervisory bodies have service contracts with the Company or its subsidiary that provide them any benefits upon termination of employment.

14.3 Information of audit, remuneration and nomination committee

The Board has not established a separate nomination or remuneration committee, but assesses the need for such committees on an ongoing basis and will establish such committees if deemed necessary by the Board.

The Company has established an audit committee. The current members of the audit committee are as follows:

Christian Sand Kirk Name, chairman (member of the Board)
Caspar Rose (Vice-Chairman of the Board)

The audit committee shall consist of 2-3 members. Members of the audit committee are elected for a one year term by and among the members of the Board of Directors.

The terms of the Audit Committee are laid down in Charter of the audit committee. The primary function of the audit committee is to assist the Board of Directors by reviewing information within the specified areas of oversight and based on that, present recommendations to the Board of Directors. The specified areas of oversight are:

a. financial reporting process;
b. systems of internal controls including risk management for the financial reporting process and the adequacy hereof;
c. external audit of the annual report;
d. control of auditors independence, including oversight of non-audit services;
e. procedure for handling complaints regarding accounting, internal accounting controls, auditing or financial reporting matters; and
f. other activities delegated from the Board of Directors

In connection hereto the Audit Committee shall also review the adequacy and effectiveness of the systems of internal controls including risk management for the financial reporting process, as well as review the external auditor's reports to the executive management team and the Board of Directors and at least annually consider the performance and independence of the external auditor.

The audit committee shall meet as often as it determines appropriate, but at least two times each year, and shall regularly inform the Board of Directors of discussions and present recommendations to the Board of Directors.

Members of the audit committee shall receive an annual fee determined by the Board of Directors in connection with the approval of the annual report.

The audit committee may engage independent counsel and other advisors as it determines necessary to carry out its duties.

14.4 Corporate governance

The Board of Directors has decided that the Company will generally comply with the Danish corporate governance recommendations (as latest expressed by the Committee on Corporate Governance in November 2014), but with the exceptions set out below. The Company will also apply necessary adjustments when required by Norwegian guidelines.

The Committee recommends that the board of directors adopt policies on corporate social responsibility.

The Company aims for a sustainable development based on combining financial performance with socially responsible behavior. The Company has not yet adopted official policies on corporate social responsibilities due to the current business size and activity level, however, it is the Company's aim to adopt such official policies on Corporate Social Responsibilities in line with the growth of the business activities, as the Company is aware of the importance of social responsibility, which is also currently reflected in the Company's individual employment contracts, underlining the importance of integrity and ethics – e.g. that the employees have an obligation to ensure that they follow the norms within the area of business they're operating in..

The Committee recommends that the board of directors establish a nomination committee.

Due to the structure and size of the Company's business, a nomination committee is not established. At least once a year the Board of Directors will conduct an assessment of the executive management and a self-assessment in order to evaluate the company's management competencies and performance in regards to its responsibilities. This is part of the tasks to be overseen by the chairman of the board.

The Committee recommends that the board of directors establish a remuneration committee

Due to the structure and size of the Company and its business, a remuneration committee is not established, but it is part of the tasks to be overseen by the chairman of the board to ensure adequate remuneration. However, the Company has a positive interest in establishing a remuneration committee once the Company's business grows

The Committee recommends that the remuneration committee do not consult with the same external advisers as the executive board of the company.

The Company does not have a remuneration committee.

The Committee recommends that the board of directors decide whether to establish a whistleblower scheme for expedient and confidential notification of possible or suspected wrongdoing.

Due to the structure and size of the Company and its business, a whistleblower scheme has not been established. However, the Company intends to establish a whistleblower scheme once the Company's business growths.

In connection hereto, the chairman of the Board has the responsibility to ensure the compliance of several of the recommendations, including some which are not put into effect as of this time, including:

The Committee recommends that at least once every year the board of directors evaluate the work and performance of the executive board in accordance with predefined clear criteria.

The Rules of Procedure for the Board states that the chairman shall evaluate the work and performance of the executive board under consideration of the achievements and results during the year. However, these criteria are not further defined as the chairman – according to the rules of procedure of the board of directors – has an ongoing

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dialogue with the executive board and assesses their work and performance under consideration of more general criteria.

Prepare a clear and transparent remuneration policy for the board of directors and the executive board.

It is the intention of the Company and the Board to adopt policies for the Company's remuneration of the Board and the Management, but for now the responsibility to propose such remuneration lies with the Chairman. The chairman of the Board of Directors shall regularly assess and propose principles for the remuneration of the Board and the Executive Management, including guidelines for incentive-based remuneration. The Company has adopted a set of general guidelines for incentive remuneration of the Executive Management, which allows for the Executive Management to receive both a short term based cash bonus (maximum of 100% of the annual salary) as well as a long term based warrant program (maximum of 100% of the annual salary) in case the Company should decide to establish such.

The Committee recommends that, if the remuneration policy includes variable components, i) limits be set on the variable components of the total remuneration package, ii) a reasonable and balanced linkage be ensured between remuneration for governing body members, expected risks and the value creation for shareholders in the short and long terms, iii) there be clarity about performance criteria and measurability for award of variable components, iv) there be criteria ensuring that qualifying periods for variable components in remuneration agreements are longer than one calendar year, and v) an agreement is made which, in exceptional cases, entitles the company to reclaim in full or in part variable components of remuneration that were paid on the basis of data, which proved to be misstated.

The Company does not have an official remuneration policy. However, it is the task of the Chairman to recommend a reasonable remuneration of the board and the management, and when adopting an official remuneration policy the Board and the Chairman in particular will bear in mind the recommendations of the committee. The Board has been granted the authority to issue warrants, see section 19.1. It is the intention of the Board to use this authority in the remuneration of the Board, Management and/or key personnel.

The Committee recommends that if share-based remuneration is provided, such programs be established as roll-over programs.

The Company does not yet have a share-based remuneration program, however, if and when such a remuneration program is adopted, it is the intention of the Company to follow the recommendations of the Committee.

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15. EMPLOYEES

15.1 Number of employees

As of year-end 2013, 2014 and 2015, the Group had 12, 10 and 16 employees, respectively, including management and part-time employees. All were hired under individual employment contracts with Ivanoff Interactive A/S. At the date of Prospectus, the Group has 17 employees hired under individual employment contracts.

15.2 Shareholdings and warrants

As of the date of this Prospectus, the following number of shares and warrants are held by current members of executive management and the Board:

Name	Position	Number of shares held
Bertel David Maigaard	Chairman	0
Caspar Rose	Vice-Chairman	7,000
Shares controlled by Christian Sand Kirk	Board member	164,214
Rasmus Lund	Board member	68,028
Henrik Kølle	CEO	12,089,658
Peter Ekman	CFO	23,941

*See Section 15.3 for details on the Company's warrant program.

15.3 Option programs and other incentive programs

At the time of this prospectus the Company does not have any warrant program in place. However, the Company has adopted a set of general guidelines for incentive remuneration of the Executive Management, which allows for the Executive Management to receive both a short term based cash bonus (maximum of 100 % of the annual salary) as well as a long term based warrant program (maximum of 100 % of the annual salary) in case the Company should decide to establish such. At a general meeting of the Company on 6 February 2015, the Board was given the following authorization to establish a warrant program and issue warrants:

"2.2 Until 6 February 2020, the Board of Directors is authorized, in one round or more, to issue warrants giving the right to subscribe up to 500,000 shares of DKK 0.50 in the Company by cash payment corresponding to a nominal amount of DKK 250,000.00 and subsequently, in one round or more, to increase the Company's share capital without preferential rights for the Company's existing shareholders in connection with the issue of new shares to the Board and the employees as determined by the Board of Directors.

Warrants entitle the holder to subscribe for shares in the Company at a subscription exercise price determined by the Board of Directors - which may be up to 25% lower than the market price.

The Board of Directors is authorized to lay down the terms and conditions governing exercise of warrants and execution of capital increases pursuant to the above authorization. The Board of Directors is also authorized to make such amendments to the Company's Articles of Association as may be required as a part of the exercise of this authority.

The Board shall annually determine concrete goals of economic or equivalent measurable nature of real importance to the Company's value as a condition for the exercise of warrants.

The new shares shall be issued in the name of the holder and shall be recorded in the name of the holder in the Company's register of shareholders, shall be negotiable instruments, and shall in every respect carry the same rights as the existing shares."

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16. MAJOR SHAREHOLDERS

16.1 Shareholders

The following list displays shareholders of the Company with holdings that exceed 5%, as of the date of this Prospectus:

Aula Holding ApS (controlled by CEO of Hugo Games, Henrik Kølle)

A person or entity that alone or together with close associates acquires Shares, options or other rights to acquire Shares, resulting in a beneficial ownership, directly or indirectly, in the aggregate meeting or exceeding the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 and 90% of the share capital or the voting rights in the Company has an obligation under the Norwegian law to notify Oslo Axess, and under Danish law to notify the Company, and the Danish FSA immediately. The Company will upon receipt of such notice register the changes in the Danish public shareholders register.

To the Company’s knowledge only the abovementioned shareholders control a shareholding exceeding any of the abovementioned thresholds.

16.2 Voting rights

The Company has one single class of shares. Each share in the Company carries one vote. No major shareholders in the Company have different voting rights.

16.3 Control of the Company

As of the date of this Prospectus, to the extent known to the Company, the Company is indirectly owned and controlled by Henrik Kølle (through his wholly owned company Aula Holding ApS), who is also the Company’s CEO. As a result of Aula Holding ApS’ substantial ownership interest in the Company, Aula Holding ApS has the ability to exert significant influence over certain actions requiring shareholder approval. The influence must be exercised in accordance with the Company’s articles of association as well as Danish corporate law. Apart from aforesaid, there are no specific measures in place regulating the exercise of influence which follows from holding a significant share or majority of the Shares.

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17. RELATED PARTY TRANSACTIONS

The related parties of the Company are comprised of members of the board of directors and executive management. Other related parties are defined by their ability, directly or indirectly, to control the other party or exercise significant influence over the other party in the decision making process. Furthermore, parties under common control or common significant influence are defined as related. All transactions between the related parties are based on the principle of "arm's length" (estimated market value).

The Company is not aware of any related party transactions from 1 January 2016 and up until the date of this Prospectus.

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18. FINANCIAL INFORMATION CONCERNING THE ISSUER'S ASSETS AND LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES -

18.1 Historical Financial Information

The historical financial information for the financial years 2013 and 2014 and 2015 have been prepared and presented according to International Financial Reporting Standards (IFRS) as adopted by the EU.

The 2013 financial statements were originally prepared in accordance with Danish Generally Accepted Accounting Principles (DK GAAP). Prior to the Trading and Official Listing process at Oslo Axess, the Company changed its accounting principles from DK GAAP to IFRS. The transition to IFRS was implemented with effect from 1 January 2013. The 2014 and 2015 financial statements comprise audited historical financial information for the financial years 2013 and 2014 and 2015 prepared and presented in accordance with IFRS. The Q1 2016 report (not audit) of the Company has also been prepared in accordance with IFRS.

The complete audited annual reports, including the audit reports, for Hugo Games (previously Haaloo Games Holding ApS) are included as appendix 2 to this Prospectus. The review of the Q1 2016 interim report, including the audit review, is included as appendix 3 to this Prospectus.

In the opinion of the Company, no significant changes in its assets, liabilities or earnings exists that would require pro forma financial information.

18.2 Auditing of historical financial information

The Company's independent auditor is Grant Thornton, registered with the Danish Business Authority under organization number CVR 34 20 99 36 and with address Stockholmsgade 45, 2100 København K, Denmark. Grant Thornton is a member of FSR – Danish Auditors. Grant Thornton was appointed as auditor on 6 January 2016.

The Company's former independent auditor was INFO:REVISION, registered with the Danish Business Authority under organization number CVR 19 26 30 96 and with address Buddingevej 312, 2860 Søborg, Denmark. INFO:REVISION is a member of FSR – Danish Auditors. INFO:REVISION was appointed as auditor on 13 April 2011. INFO:REVISION did not want to continue as auditor for the Company following the Company's listing on Oslo Axess.

Beierholm Revision, registered with the Danish Business Authority under organization number CVR 32 89 54 68 and with address Voergårdvej 2, 9200 Aalborg SV, Denmark has converted the Company's financial statements for 2013 and 2014 into IFRS format. Beierholm Revision is a member of FSR – Danish Auditors.

INFO:REVISION has audited the Company's IFRS financial statements for 2013 and 2014 as well as provided a review of the Q1 2015 interim report. The audit reports for the historical financial information were all issued without qualifications.

Neither INFO:REVISION or Grant Thornton has audited, reviewed or produced any other report on any information provided in this Prospectus.

18.3 Dividend and shareholder policy

The Company currently has no policy on or intention of paying dividends, however the Board of Directors shall ensure that dividends are recommended under due consideration of the company's business, financial situation as well as other factors and risk elements, which could have an influence on the company's business.

18.4 Legal and arbitration proceedings

The Group has not been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Group is aware) during the previous twelve months which may have, or have had in the recent past, significant effects on the Group's financial position or profitability.

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18.5 Significant change in the Company’s financial or trading position

There have not been any significant changes to the Group’s financial or trading position subsequent to the end of Q1 2016.

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19. ADDITIONAL INFORMATION

19.1 Share Capital

General

The Company has one single class of shares. Each share in the Company carries one vote.

The share capital of the Company as of the date of this Prospectus is nominal DKK 12,637,074,000 divided into 25,274,148 shares, each with a nominal value of DKK 0.50.

All the above shares have been fully paid and issued. The Shares are registered in VPS under the ISIN DK0060637999.

Following completion of the Rights Issue, the share capital of the Company will be up to DKK 22,637,074 divided in up to 45,274,148 Shares, each with a nominal value of DKK 0.50.

None of the shares to be issued in connection with the Rights Issue have been paid nor issued as of the date of this Prospectus.

The Company’s registrar is Nordea Bank Norge ASA, P.O. Box 1166 Sentrum, NO-0107 Oslo.

There are no shares in the Company or its subsidiary held by, or on behalf of the Company or its subsidiary.

Outstanding authorizations

The Company’s Board of Directors is granted the following authorizations, as specified in the Company’s articles of association, to increase the Company’s share capital:

Warrants entitle the holder to subscribe for shares in the Company at a subscription exercise price determined by the Board of Directors - which may be up to 25% lower than the market price.

The Board shall annually determine concrete goals of economic or equivalent measurable nature of real importance to the Company’s value as a condition for the exercise of warrants.

The abovementioned authorization can be used one or more times.

The decision of the Board of Directors to raise convertible loans must be recorded in the Articles of Association and the Board of Directors is authorised to amend the articles accordingly.

“2.4 Until 6 February 2020, the Board of Directors is authorized, with preferential right for the existing shareholders of the Company, to increase the Company’s share capital one or more times by up to a total nominal amount of DKK 25,000,000 by cash payment. The capital increase can take place below market price.

New shares issued pursuant to the above shall be issued in the name of the holder and shall be recorded in the name of the holder in the Company’s register of shareholders, shall be negotiable documents and shall in every respect carry the same rights as the existing shares. The Board of Directors is authorized to lay down the terms and conditions for capital increases pursuant to the above authorization and to make any such amendments in the Company’s Articles of Association as may be required as a result of the Board of Directors’ exercise of the said authorization.”

“2.5 Until 6 February 2020, the Board of Directors is authorized, without preferential right for the existing shareholders of the Company, to increase the Company’s share capital one or more times by up to a total nominal amount of DKK 25,000,000 by cash as well as non-cash payment or by conversion of debt. The capital increase shall take place at market price.

New shares issued pursuant to the above shall be issued in the name of the holder and shall be recorded in the name of the holder in the Company’s register of shareholders, shall be negotiable documents and shall in every respect carry the same rights as the existing shares. The Board of Directors is authorized to lay down the terms and conditions for capital increase pursuant to the above authorization and to make any such amendments in the Company’s Articles of Association as may be required as a result of the Board of Directors’ exercise of the said authorization.”

2.6 Until 6 February 2020, the Board of Directors is authorized, with preferential right for the existing shareholders of the Company, to increase the Company’s share capital one or more times by up to a total nominal amount of DKK 25,000,000 by conversion of the company’s reserves into share capital by the issue of bonus shares (in Danish: fondsforhøjelse). The capital increase shall take place at market price.

“2.7 The combined total share capital increase, performed pursuant to the given authorisations in provision 2.3, 2.4, 2.5 and 2.6, cannot exceed nominal DKK 25,000,000.”

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If the Rights Issue is fully subscribed, the board of directors will not have a remaining authorization to increase the share capital of the Company.

Warrants

At the time of this prospectus the Company does not have any warrant program in place. However, the Company has adopted a set of general guidelines for incentive remuneration of the Executive Management, which allows for the Executive Management to receive both a short term based cash bonus (maximum of 100% of the annual salary) as well as a long term based warrant program (maximum of 100% of the annual salary) in case the Company should decide to establish such. At a general meeting of the Company on 6 February 2015, the Board was given the following authorization to establish a warrant program and issue warrants:

Warrants entitle the holder to subscribe for shares in the Company at a subscription exercise price determined by the Board of Directors - which may be up to 25% lower than the market price.

The Board of Directors is authorized to lay down the terms and conditions governing exercise of warrants and execution of capital increases pursuant to the above authorization. The Board of Directors is also authorized to make such amendments to the Company's Articles of Association as may be required as a part of the exercise of this authority.

The Board shall annually determine concrete goals of economic or equivalent measurable nature of real importance to the Company's value as a condition for the exercise of warrants.

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History of share capital development since incorporation

Date	Type of change	Change in Share Capital DKK	Per value DKK	Consideration price DKK	Total share capital DKK	Number of new shares	Total number of shares
13.04.2011	Formation	80,000	1.00	1.00	80,000	80,000	80,000
09.09.2014	Share capital increase	28,917	1.00	518.726	108,917	28,917	108,917
30.12.3025	Conversion to A/S	9,891,083	1.00	1.00	10,000,000	9,891,083	10,000,000
06.02.2016	Share split	0	0.50	n/a	10,000,000	10,000,000	20,000,000
26.06.2015	Share capital increase	2,500,000	0.50	9.370	12,500,000	5,000,000	25,000,000
27.01.2016	Share capital increase	137,074	0.50	3.648	12,637,074	274,148	25,274,148

19.2 Memorandum and Articles of association

This section is based on the Company's Articles of Association as adopted in the Company's Memorandum of Association on 13 April 2011 and amended at subsequent general meetings latest on 6 January 2016.

The Company's objects and purposes

According to the Company's Memorandum of Association and article 1.2 in the Company's Articles of Association, the object of the company is to exercise commercial activities, including developing software and IT-based games and all other activities, which according to the management is deemed, related hereto.

Members of the administrative, management and supervisory bodies

The Company's Board of Directors shall consist of 3 to 5 directors elected each year at the annual general meeting of the company for the period until the next annual general meeting. The directors are eligible for reelection.

The Board of Directors shall appoint a Chairman.

The Board of Directors forms a quorum when more than half of all directors are represented. Board resolutions are adopted by simple majority. The Chairman has the casting vote in case of equality of votes.

The Board of Directors has adopted rules of procedure for its work.

The Board of Directors shall appoint the executive management (management board) of the Company consisting of 1 to 4 members, to be in charge of the day-to-day operation of the company. One member shall by the Board of Directors be appointed Chief Executive Officer (CEO).

Rights attached to the Shares

The Company has only one class of shares. All shares carry equal rights.

Authorization to Increase the Share Capital

Pursuant to the Company's Articles of Association the Board of Directors has been granted the following authorizations to increase the Company's share capital.

2.2 Until 6 February 2020, the Board of Directors is authorized, in one round or more, to issue warrants giving the right to subscribe up to 500,000 shares of DKK 0.50 in the Company by cash payment corresponding to a nominal amount of DKK 250,000.00 and subsequently, in one round or more, to increase the Company's share capital without preferential rights for the Company's existing shareholders in connection with the issue of new shares to the Board and the employees as determined by the Board of Directors.

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Warrants entitle the holder to subscribe for shares in the Company at a subscription exercise price determined by the Board of Directors - which may be up to 25% lower than the market price.

The Board of Directors is authorized to lay down the terms and conditions governing exercise of warrants and execution of capital increases pursuant to the above authorization. The Board of Directors is also authorized to make such amendments to the Company's Articles of Association as may be required as a part of the exercise of this authority.

The Board shall annually determine concrete goals of economic or equivalent measurable nature of real importance to the Company's value as a condition for the exercise of warrants.

"2.3 Until 6 February 2020, the Board of Directors is authorized to decide to obtain loans against issue of convertible notes with the right to subscribe for shares in the Company (convertible loans), and the Board of Directors is authorized to make the related capital increase, cf. provision 2.5, for up to a total nominal amount of DKK 5,000,000.

The abovementioned authorization can be used one or more times.

The decision of the Board of Directors to raise convertible loans must be recorded in the Articles of Association and the Board of Directors is authorised to amend the articles accordingly."

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respect carry the same rights as the existing shares. The Board of Directors is authorized to lay down the terms and conditions for capital increases pursuant to the above authorization and to make any such amendments in the Company's Articles of Association as may be required as a result of the Board of Directors' exercise of the said authorization."

New shares issued pursuant to the above shall be issued in the name of the holder and shall be recorded in the name of the holder in the Company's register of shareholders, shall be negotiable documents and shall in every respect carry the same rights as the existing shares. The Board of Directors is authorized to lay down the terms and conditions for capital increase pursuant to the above authorization and to make any such amendments in the Company's Articles of Association as may be required as a result of the Board of Directors' exercise of the said authorization."

"2.7 The combined total share capital increase, performed pursuant to the given authorisations in provision 2.3, 2.4, 2.5 and 2.6, cannot exceed nominal DKK 25,000,000."

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General Meetings and Voting Rights

The Company’s general meetings shall be held in the Capital Region of Norway or Denmark.

The Company’s annual general meeting shall be held before the end of April. Not later than eight weeks before the contemplated date of the annual general meeting, shall the date of the general meeting be published and the deadline for submitting requests for specific business to be included in the agenda.

Extraordinary general meetings shall be held when determined by the Board of Directors or requested by the Company’s auditor. Furthermore, the Board of Directors shall convene an extraordinary general meeting within two weeks of receipt of a written request from shareholders representing at least 5% of the share capital containing specific proposals for the business to be transacted at such extraordinary general meeting.

General meetings shall be convened by the Board of Directors with at least three weeks’ and not more than five weeks’ notice by publishing a notice on the Company’s website. Furthermore, a notice of the general meeting shall be sent by way of electronic communication or by ordinary post, as decided by the Company, to all shareholders recorded in the Company’s register of shareholders who have requested such notice.

The notice shall specify the time and place of the general meeting and the agenda containing the business to be transacted at the general meeting. If a proposal to amend the Articles of Association is to be considered at the general meeting, the main contents of the proposal shall be specified in the notice. Notices convening general meetings at which a resolution shall be passed pursuant to Section 77 (2), Section 92 (1), or Section 107 (1) or (2) of the Danish Companies Act shall set out the full wording of the proposals.

The Company’s general meetings shall be held in Danish or English and the Board of Directors may decide to offer simultaneous interpretation into Danish or English. Documents prepared in connection with or following a general meeting shall be in Danish and/or English as decided by the Board of Directors.

Annual reports shall be prepared in English only and, if decided by the Board of Directors, in Danish.

Every shareholder is entitled to have specific business transacted at the annual general meeting, provided that the shareholder submits a written request to that effect to the Board of Directors not later than six weeks before the date of the annual general meeting.

The right of a shareholder to attend a general meeting and to vote is determined relative to the shares held by the shareholder at the registration date. The registration date is one week before the general meeting. The shares held by each shareholder are determined at the registration date based on the number of shares held by that shareholder as registered in the Company’s register of shareholders and on any notification of ownership received by the Company at the registration date for the purpose of registration in the Company’s register of shareholders, which have not yet been registered.

The Company has only one class of shares. All shares carry equal voting rights. At the general meeting, each Share of the nominal value of DKK 0.50 shall entitle the holder thereof to one vote.

Any shareholder who is entitled to attend the general meeting pursuant to the Company’s Articles of Association and who wishes to attend the general meeting shall request an admission card not later than three days before the general meeting is held. A shareholder may, subject to having requested an admission card in accordance with the Articles of Association, attend in person or by proxy, and the shareholder or the proxy may attend together with an adviser.

The right to vote may be exercised by a written and dated instrument of proxy in accordance with applicable laws. The Board of Directors of the Company may be appointed as proxy. A shareholder who is entitled to participate in the general meeting according to the Articles of Associations is further entitled to vote by correspondence

according to the Danish Companies Act’s provisions thereon. Such votes by correspondence shall be received by the Company the day before the general meeting at the latest. Votes by correspondence cannot be withdrawn.

Resolutions by the General Meetings and Amendments to the Articles of Associations

Resolutions at general meetings shall be passed by a simple majority of votes cast, unless otherwise prescribed by law or by the Company’s Articles of Association.

Adoption of changes to the Company’s Articles of Association, dissolution of the Company, merger or demerger requires that the resolution is adopted by at least 2/3 of the votes cast as well as the share capital represented at the general meeting, unless applicable laws prescribe stricter or less strict adoption requirements or applicable laws confer specific authority to the Board of Directors or other bodies.

The provisions in the Company’s Articles of Association relating to a change of the rights of shareholders or a change to the capital are not more stringent than required by the Danish Companies Act.

Preemption Rights

Under Danish law, the Company’s shareholders generally have preemption rights if the general meeting of the Company resolves to increase the share capital by cash payment. However, the preemption rights of the shareholders may be derogated from a majority comprising at least 2/3 of the votes cast and of the share capital represented at the general meeting if the share capital increase is made at market price. The Board of Directors is authorized to increase the Company’s share capital in one or more issues at market price without pre-emption rights to the Company’s shareholders. See “Authorization to Increase the Share Capital”.

Redemption Policy

No shareholder is obliged to have his or her shares redeemed.

Dissolution and Liquidation

In the event of dissolution and liquidation, the Company’s shareholders are entitled to participate in the distribution of assets in proportion to their nominal shareholdings after payment of the Company’s creditors.

Indication of Takeover Bids

No takeover offers have been made by any third party in respect of our shares during the past or current financial year.

The Company’s Articles of Association do not contain provisions that are likely to have the effect of delaying, deferring or preventing a change in control of the Company.

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20. MATERIAL CONTRACTS

The following is a description of what the Company deems to be its material contracts as of the date of this Prospectus. However as is the case for most gaming companies, Hugo's IPR also form a core asset which will prohibit generic competition throughout the lifetime of the IPR.

Multisport & Image Management

Royalty agreement with Multisport & Image Management (MIM) Limited signed 19 December 2014 regarding the use of Cristiano Ronaldo (CR)'s image rights together with the Hugo brand in mobile games, specifically "arcade games" and "endless runner" games. The term of the agreement is two years from 1 April 2015 (or from the official launch of the new Hugo game featuring CR).

Hugo Games A/S is required to pay a non-disclosed fixed fee to MIM for this agreement. 70% of this fee was paid in 2014 and the remaining 30% will be paid in the period 2016-2017. The fixed fee is denominated in USD but at the current USD/DKK exchange rate, the fee would be a single-digit figure in DKK million. In addition, Hugo Games shall pay a non-disclosed variable fee to MIM based on net sales revenues after deduction of transaction fees collected by Apple Store, Google Play etc for the specific game.

The agreement can be extended or applied to a new Hugo game (both for another two years) provided the agreement generates a certain minimum royalty to MIM.

Cameron J Newton Enterprises, Inc.

Royalty agreement with Cameron J Newton Enterprises, Inc. (CJN) entered into in April 2016 regarding the use of Cameron J Newton's image rights in mobile games, specifically "arcade games" and "endless runner" games. The agreement terminates automatically at the end of 2018.

Hugo Games A/S is required to pay a non-disclosed fixed fee to CJN for this agreement. 20% of this fee was paid at signing (after 31.,03.2016) and the remaining 80% will be paid in the period 2016-2017. The fixed fee is denominated in USD but at the current USD/DKK exchange rate, the fee would be a single-digit figure in DKK million. In addition, Hugo Games shall pay a non-disclosed variable fee to CJN based on net sales revenues after deduction of transaction fees collected by Apple Store, Google Play etc for the specific game.

The agreement can be extended following negotiations between the parties.

Nyjah Houston Inc

Royalty agreement with Nyjah Houston Inc (NH) entered into in February 2016 regarding the use of Nyjah Houston's image rights in mobile games, specifically "arcade games" and "endless runner" games. The term of the agreement is two years from 1 July 2016 (or from the official launch of the character in the game, whichever comes first).

Hugo Games A/S is required to pay a non-disclosed fixed fee to NH for this agreement. 25% of this fee was paid at signing and the remaining 75% will be paid in the period 2016-2017. The fixed fee is denominated in USD but at the current USD/DKK exchange rate, the fee would be a single-digit figure in DKK million. In addition, Hugo Games shall pay a non-disclosed variable fee to NH based on net sales revenues after deduction of transaction fees collected by Apple Store, Google Play etc for the specific game.

The agreement can be extended following negotiations between the parties.

Lima Sky LLC

Hugo Games A/S will develop the game using the Doodle Jump IP whereas Lima Sky will publish and market the game. Both parties are obliged to cross-promote the game.

Revenues from the game will be split 50/50, subject to specific provisions of recouping of cost borne by a party pursuant to the agreement. Expected release of the game in Q1–Q2 2017.

Fuzzy Frog Ltd.

Development and royalty agreement signed 17 November 2014 with Fuzzy Frog Ltd. regarding development of mobile games. Besides payment according to work done the agreement gives Fuzzy Frog the right to receive a limited share of net revenues depending on the success of the games.

With respect to the games developed, and subject to payment of fees, under this agreement Hugo Games A/S is granted the non-exclusive license to use the works developed by Fuzzy Frog Ltd. for the purpose of the mobile games marketed by Hugo Games A/S.

Developer agreements

Hugo Games A/S has entered into standard developer agreements with both Apple Inc. and Google Inc. regarding marketing and sale of games through iTunes and Google Play, respectively. Both companies receive a commission of 30% for management, taking care of VAT payments etc.

21. THIRD PARTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF ANY INTEREST

The Company confirms that when information in this Prospectus has been sourced from a third party it has been accurately reproduced and as far as the Company is aware and is able to ascertain from the information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

The Company has relied on the services of the following experts in the preparation of this Share Registration Document:

Sandel, Løje & Partnere Advokatpartnerselskab, CVR-no. 34 61 03 39, Øster Allé 42, 6., 2100 Copenhagen, has delivered a legal opinion regarding the Company’s intellectual property rights in relation to trademarks and copyright, see section 9 “Research and Development, IPR and Licenses”. Sandel, Løje & Partnere is a law firm specialized in intellectual property and has assisted the Company for many years in administrating and controlling the many intellectual rights of the Hugo brand, but besides the professional work relationship Sandel, Løje & Partnere does not have any material interest in the Company. The report was delivered at the Company’s request and Sandel, Løje & Partnere has accepted the report to be included in this Prospectus.

22. DOCUMENTS ON DISPLAY

Copies of this Prospectus may be obtained from Hugo and from the Manager. Copies of the following documents will, during the life of this Prospectus, be available for inspection at any time during normal business hours (between 08:30 16:30) and on any business day free of charge at the registered office of the Company, Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark:

The memorandum and the current articles of association as of the date of this Prospectus;
All reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the Company’s request any part of which is included or referred to in the Prospectus;
The historical financial information for the Company and its subsidiaries for the financial years 2014 – 2015 The historical financial information can also be viewed electronically at the Company’s web page www.hugogames.com.

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The Company hereby incorporates the following documents by reference into the Prospectus:

Disclosure requirement of the Prospectus	Section in Prospectus	Reference document	Website / reference
The independent auditor’s review report for Q1 2016	Share Registration Document section 18.1	Reviewed report of consolidated financials for Q1 2016 page	Appendix 3 in this Prospectus
The independent auditor’s report for 2015	Share Registration Document section 18.1	Audited consolidated financials for the year ended 31 December 2014 for Hugo, pages 5-6	Appendix 2 in this Prospectus
The independent auditor’s report for 2014	Share Registration Document section 18.1	Audited consolidated financials for the year ended 31 December 2013 for Hugo, page 4-5.	Appendix 2 in this Prospectus

Any information included in the documents incorporated by reference but not listed in the cross reference list is given for information purposes only.

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23. INFORMATION ON HOLDINGS

Reference is made to section 5 in the Prospectus for an overview of the Company’s holdings in any undertakings.

DEFINITIONS AND GLOSSARY FOR THE PROSPECTUS IN GENERAL

Term	Definition/Glossary
Applicant	The investor applying for Offer Shares through submission of the Subscription Form
Subscription	The submission of the Subscription Form to the Manager
Subscription Form	The subscription form for Offer Shares in the Rights Issue attached as Appendix 4 to this Prospectus
Subscription Period	The Subscription Period for the Rights Issue which will take place from 09:00 CEST on 27 June 2016 to 16:00 CEST on 11 July 2016.
Articles of Association	The prevailing articles of association of the Company
Aula Holding ApS	Aula Holding ApS is 100% owned and controlled by Henrik Kølle, CEO of the Company. Aula Holding ApS is the largest shareholder of the Company, controlling 47.8% of the issued share capital as of the date of the Prospectus.
Board (of Directors)	The board of directors of Hugo Games A/S; Bertel David Maigaard (chairman), Caspar Rose (vice-chairman), Christian Sand Kirk (board member) and Rasmus Lund (board member)
CEO	Chief Executive Officer, Henrik Kølle
CFO	Chief Financial Officer, Peter Ekman
Company	Hugo Games A/S, Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark
Danish Corporate Governance	Danish Code of Practice for Corporate Governance as latest expressed by the Committee on Corporate Governance in November 2014
DKK	Danish Kroner
Executive Management	The CEO (Henrik Kølle) and CFO (Peter Ekman) of the Company
FSAN	The Norwegian Financial Supervisory Authority (No: Finanstilsynet)
G&A	General and Administrative Expenses
Group	The Company and its subsidiaries
Hugo Games	Hugo Games A/S or the Company
IFRS	International Financial Reporting Standards
IPR	Intellectual Property Rights
ISIN	Securities number in the Norwegian Registry of Securities (VPS)
Listing	The listing of the Offer Shares on the regulated market place Oslo Axess
Manager	Norne Securities AS
NOK	Norwegian Krone
Rights Issue	The offering of 20,000,000 Offer Shares in an issue with tradable subscription rights for existing shareholders in the Company
Subscription Price	The price payable for the Offer Shares of NOK 1.50 per share
Offer Shares	20,000,000 new shares to be issued by the Company pursuant to the Rights Issue
Oslo Axess	Oslo Axess is a regulated market place operated by Oslo Børs ASA in Norway
Prospectus	This Prospectus dated 22 June 2016 prepared in connection with the Rights Issue
QIB	Qualified Institutional Buyer
R&D	Research & Development
Shares	All the shares in the Company
Subscriber(s)	Investor subscribing in the Rights Issue
Trading and Official Listing	The trading and official listing of the Offer Shares on the regulated market place Oslo Axess
Underwriters	The underwriters of the Rights Issue as set out in section 5.11 of the Share Securities Note
Underwriting Agreement	The Underwriting Agreement dated 21 June 2016
Underwriting Amount	The maximum amount in NOK each Underwriter has undertaken to guarantee
VPS	Verdipapirsentralen (Norwegian Central Securities Depository), which organizes the Norwegian paperless securities registration system

GLOSSARY FOR CHAPTER 4.1 IN THE SHARE REGISTRATION DOCUMENT

Term	Glossary
Android	Operating system developed by Google for smartphones and tablet devices.
AppAnnie	The source refers to information extracted from various articles on www.appannie.com
App Store	An online marketplace where consumers can download and/or purchase games and other apps; including but not limited to Apple App Store (iOS), Google Play (Android) and Amazon App Store (Amazon).
ARPDAU	Average revenue per daily active user
ARPPU	Average revenue per paying user per month
Conversion	Mobile conversion is about converting F2P non-paying players into paying players.
CPI (cost per install)	The amount of marketing currency (i.e. DKK or USD) required for an app to require a single user. This metric is a representation of non-incentivized traffic.
DAU (daily active users)	The number of unique users that have used an application at least once over the course of a day.
DigiStarter	A non-patented server-based framework build to support apps released by Hugo Games.
F2P/Free-to-Play/Freemium	Offering a game, app or service free of charge, while charging a premium for advanced features, extra content and/or in-game consumables.
iOS	Operating system developed by Apple.
IAP (in-app purchase)	A purchase of virtual goods made inside a mobile game.
LTM	Last twelve months
LTV (lifetime value)	The average revenue generated over the entire lifespan of a player in a single game.
MAU (monthly active users)	The number of unique users that have used an application at least once over the course of a month.
Organic Downloads	Increase in number of downloads originating from non-commercial activities like high app store rankings, great consumer reviews and other social interactions such as word-of-mouth.
P2P/Pay-to-Play/Premium	Requiring an initial cost before download, but can also include additional charging a premium for advanced features, extra content and/or in-game consumables.
Retention	Retention or Retention Rate is defined as what percentage of people who played a specific game within a specific period (i.e. percentage of people that playing a game day one – are still playing the same game day ten).
SDK	Software Developer Kit
Think Gaming	The source refers to information extracted from the website https://thinkgaming.com on the basis of a monthly subscription.
Virtual goods	In-game items or game-related services, such as virtual currency or temporary subscription, which enable or enhance games and/or experience.
Whales	Top spending users who typically generate bulk of revenue, usually defined by a percentage (i.e. top 10% of spenders) or an amount (i.e. consumers with a lifetime value of more than USD 150).
Wiki	Information extracted from the Wikipedia website regarding Hugo the Troll, http://en.wikipedia.org/wiki/Hugo_(franchise).
Mobile Game Genres
---	---
Action	Games that emphasizes physical challenges
Adventure	Games that employ a narrative based gameplay
Arcade	Games that replicate the simple yet challenging gameplay mechanics of arcade games
Collectible card game (CCG) or Trading Card Game (TCG)	Games of strategy where players battle with their own deck of cards sold in random assortments and/or traded amongst players. Gameplay is primarily determined by drawing and playing cards.
Casino	Games that simulate casino gameplay like poker or slots.
Casual	Games with low learning curve that can be picked up rather quickly and easily.
Core or Hard-core	Games with a high learning curve that requires dedication, commitment and time to play.
Match-3	Games that require the completion of matching-three or more objects to progress through gameplay.
Mid-core	Games with a reasonably low learning curve that requires more commitment than casual games but offers more resource flexibility than a core game

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Puzzle	Games that require the completion of puzzles to progress through gameplay.
Racing	Games the simulate races.
Role Playing Game (RPG)	Games where the player takes on the role and decisions of a character playing through a fictional setting.
Simulation	Games that replicate “real-life” scenarios in the form of gameplay.
Sports	Games that simulate sports gameplay
Strategy	Games that focus on strategic planning in either real-time or turn-based gameplay.
Super casual	Sub-category of “Casual”: Games which can be picked up instantly and can be played by a gamer who is fairly new to mobile games and mainly plays as a distraction when the gamer has some minutes to spare, for example while waiting for the bus, sitting in the train, or when the gamer generally is bored.
Word	Games that requires combination or creation of words to progress or win.

Appendix 1 - Current articles f association of Hugo Games AS

VEDTÆGTER/ARTICLES OF ASSOCIATION
HUGO GAMES A/S
CVR-NR: 33 59 71 42

	Vedtægter for Hugo Games A/S	Articles of Association for Hugo Games A/S
2.	Navn og formål	1. Name and Object
1.1	Selskabets navn er Hugo Games A/S. Selskabets binavn er Haaloo Games A/S.	1.1 The name of the Company is Hugo Games A/S. The second name of the Company is Haaloo Games A/S.
1.2	Selskabets formål er at udøve erhvervsmæssig virksomhed, herunder udvikling af software og IT-baseret spil samt al virksomhed som efter direktionens skøn er beslægtet hermed.	1.2 The object of the Company is to exercise commercial activities, including developing software and IT-based games and all activities which according to the management is deemed related hereto.
2.	Selskabskapital	2. Share Capital
2.1	Selskabets aktiekapital udgør nominelt DKK 12,637,074 fordelt i aktier à DKK 0,50 eller multipla heraf. Aktiekapitalen er fuldt indbetalt.	2.1 The share capital is nominal DKK 12,637,074 divided into shares of DKK 0.50 each or multiples thereof. The share capital is fully paid up.
2.2	Bestyrelsen er indtil den 6. februar 2020 bemyndiget til i en eller flere runder at udstede warrants, der samlet giver ret til at tegne op til 500.000 aktier af DKK 0,50 i selskabet ved kontant betaling svarende til op til nominelt DKK 250.000,00 og til efterfølgende en eller flere gange at forhøje aktiekapitalen i forbindelse med udstedelsen af nye aktier til direktionen og medarbejdere efter bestyrelsens nærmere beslutning, uden fortegningsret for eksisterende aktionærer.	2.2 Until 6 February 2020, the Board of Directors is authorized, in one round or more, to issue warrants giving the right to subscribe up to 500,000 shares of DKK 0.50 in the Company by cash payment corresponding to a nominal amount of DKK 250,000.00 and subsequently, in one round or more, to increase the Company's share capital without preferential rights for the Company's existing shareholders in connection with the issue of new shares to the Board and the employees as determined by the Board of Directors.
	Warrants giver ret til at tegne aktier i selskabet til en udnyttelsespris,	Warrants entitle the holder to subscribe for shares in the Company at a subscription exercise price

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som fastsættes af bestyrelsen og som kan være op til 25 % lavere end markedskursen.

Bestyrelsen er bemyndiget til at fastsætte de nærmere vilkår for udnyttelse af warrants og gennemførelse af kapitalforhøjelser i henhold til ovennævnte bemyndigelse. Bestyrelsen bemyndiges desuden til at foretage sådanne ændringer i nærværende vedtægter, som måtte være nødvendige som led i udnyttelsen af denne bemyndigelse.

Bestyrelsen skal årligt fastsætte konkrete målsætninger af økonomisk eller tilsvarende målbar karakter og af reel betydning for Selskabets værdi som betingelse for udnyttelse af warrants.

Udnyttelse af warrant i form af nytegning af aktier kan kun ske i nærmere af bestyrelsen definerede perioder, som løber i forlængelse af godkendt årsrapport i året efter opfyldelse af de fastlagte målsætninger.

For de nytegnede aktier skal i øvrigt gælde, at de nye aktier skal lyde på navn og skal noteres på navn i selskabets ejerbog, samt at de nye aktier er omsætningspapirer og har i øvrigt i enhver henseende samme rettigheder som de eksisterende aktier.

2.3 Bestyrelsen er i perioden indtil den 6. februar 2020 bemyndiget til at træffe beslutning om optagelse af lån mod udstedelse af konvertible gældsbreve (konvertible lån) samt til at træffe beslutning om den

determined by the Board of Directors - which may be up to 25% lower than the market price.

The Board of Directors is authorized to lay down the terms and conditions governing exercise of warrants and execution of capital increases pursuant to the above authorization. The Board of Directors is also authorized to make such amendments to the Company's Articles of Association as may be required as a part of the exercise of this authority.

The Board shall annually determine concrete goals of economic or equivalent measurable nature of real importance to the Company's value as a condition for the exercise of warrants.

2.3 Until 6 February 2020, the Board of Directors is authorized to decide to obtain loans against issue of convertible notes with the right to subscribe for shares in the Company (convertible loans), and the Board of

dertilhørende kapitalforhøjelse, jf. pkt. 2.5., for i alt op til nominelt DKK 5.000.000.

Ovennævnte bemyndigelse kan udnyttes ad én eller flere gange.

Selskabets aktionærer skal ikke have fortegningsret ved bestyrelsens udnyttelse af denne bemyndigelse - det være sig i forbindelse med udstedelse af konvertible gældsbreve eller i forbindelse med udnyttelsen af konvertering af gældsbrevene - og de konvertible gældsbreve udstedes til en konverteringskurs, som mindst svarer til markeds kursen på tidspunktet for bestyrelsens beslutning.

De nærmere vilkår for udstedelse af konvertible gældsbreve fastsættes af bestyrelsen, herunder regler om lånevilkår og konvertering af gældsbrevene, samt om modtagerens retstilling i tilfælde af kapitalforhøjelse, kapitalnedsættelse, udstedelse af nye konvertible gældsbreve samt selskabets opløsning, fusion eller spaltning inden konverterings tidspunktet.

Bestyrelsen kan efter de til enhver tid gældende regler i selskabsloven genanvende eller genudstede eventuelle bortfaldne ikke udnyttede konvertible gældsbreve, forudsat at genanvendelsen eller genudstedelsen finder sted inden for de vilkår og tidsmæssige begrænsninger, der fremgår af ovennævnte bemyndigelse. Ved genanvendelse forstås adgangen

Directors is authorized to make the related capital increase, cf. provision 2.5, for up to a total nominal amount of DKK 5,000,000.

The abovementioned authorization can be used one or more times.

The shareholders of the Company shall not have pre-emption right when the Board of Directors makes use of the abovementioned authorization - neither in connection to the issuing of convertible notes nor in connection to the conversion of such convertible notes - and the convertible notes shall be issued at a conversion price which as a minimum corresponds to the market value at the time of the Board of Directors' decision to issue such convertible notes.

The terms and conditions for the convertible notes shall be determined by the Board of Directors, in-cluding rules of terms of loan and conversion of the notes, and the legal position of the recipient in case of a capital increase, capital decrease, issuance of new convertible notes or the dissolution, merger or demerger of the company before the time of conversion.

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for bestyrelsen til at lade en anden
aftalepart indtræde i en allerede
bestående aftale om
konverteringsret. Ved
genudstedelse forstås bestyrelsens
mulighed for indenfor samme
bemyndigelse at genudstede nye
konvertible gældsbreve, hvis de
allerede udstedte, er bortfaldet.

Bestyrelsens beslutning om optagelse af konvertible lån skal optages i vedtægterne. Bestyrelsen er bemyndiget til at foretage de dertilhørende fornødne vedtægtsændringer.

2.4 Bestyrelsen er i perioden indtil den 6. februar 2020 bemyndiget til med fortegningsret for selskabets eksisterende aktionærer at træffe beslutning om at forhøje selskabets aktiekapital ad én eller flere gange med i alt op til nominelt DKK 25.000.000 ved kontant betaling. Forhøjelsen kan ske til under markedskursen.

For de nytegnede aktier skal i øvrigt gælde, at de nye aktier skal lyde på navn og skal noteres på navn i selskabets ejerbog, samt at de nye aktier er omsætningspapirer og i øvrigt i enhver henseende har samme rettigheder som de eksisterende aktier. Bestyrelsen bemyndiges til at fastsætte de nærmere vilkår for kapitalforhøjelser i henhold til ovenstående bemyndigelse og til at foretage de ændringer i selskabets vedtægter, der måtte være nødvendige som følge af bestyrelsens udnyttelse af nævnte bemyndigelse.

2.5 Bestyrelsen er i perioden indtil den 6. februar 2020 bemyndiget til den fortegningsret for selskabets eksisterende aktionærer at træffe beslutning om at forhøje selskabets aktiekapital ad én eller flere gange med i alt op til nominelt DKK 25.000.000 ved kontant betaling.

4.1 Until 6 February 2020, the Board of Directors is authorized, with preferential right for the existing shareholders of the Company, to increase the Company's share capital one or more times by up to a total nominal amount of DKK 25,000,000 by cash payment. The capital increase can take place below market price.

2.5 Until 6 February 2020, the Board of Directors is authorized, with preferential right for the existing shareholders of the Company, to increase the Company's share capital one or more times by up to a total nominal amount of DKK 25,000,000 by conversion of the company's reserves into share capital by the issue of bonus shares (in Danish: fondsforhøjelse. The capital increase shall take place at market price.

2.6 Bestyrelsen er i perioden indtil den 6. februar 2020 bemyndiget til med fortegningsret for selskabets eksisterende aktionærer at træffe beslutning om at forhøje selskabets aktiekapital ad én eller flere gange med i alt op til nominelt DKK 25.000.000 ved overførsel af selskabets reserver til selskabskapital ved fondsforhøjelse. Forhøjelsen skal ske til markedskursen.

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navn og skal noteres på navn i selskabets ejerbog, samt at de nye aktier er omsætningspapirer og i øvrigt i enhver henseende har samme rettigheder som de eksisterende aktier. Bestyrelsen bemyndiges til at fastsætte de nærmere vilkår for kapitalforhøjelser i henhold til ovenstående bemyndigelse og til at foretage de ændringer i selskabets vedtægter, der måtte være nødvendige som følge af bestyrelsens udnyttelse af nævnte bemyndigelse.

2.7 Den samlede kapitalforhøjelse, som kan gennemføres ved udnyttelse af bemyndigelserne i punkt 2.3, 2.4, 2.5 og 2.6, kan ikke overstige nominelt DKK 25.000.000.

Selskabets aktier

3.1 På generalforsamlingen giver hvert aktiebeløb på DKK 0,50 én stemme.

3.2 Aktierne skal lyde på navn og noteres i selskabets ejerbog. Ejerbogen føres af Nordea Bank, Norge ASA, selskabsregistreringsnummer 911 44 110 i Norge, Middelthunsgt 17, N-0368 Oslo, Norge, som selskabets operatør af konto i Verdipapirsentralen. Ejerbogen er ikke tilgængelig for aktionærerne, medmindre andet fremgår af lovgivningen.

3.3 Aktierne er omsætningspapirer. Der gælder ingen indskrænkninger i aktiernes omsættelighed.

the holder and shall be recorded in the name of the holder in the Company's register of shareholders, shall be negotiable documents and shall in every respect carry the same rights as the existing shares. The Board of Directors is authorized to lay down the terms and conditions for capital increase pursuant to the above authorization and to make any such amendments in the Company's Articles of Association as may be required as a result of the Board of Directors' exercise of the said authorization.

2.7 The combined total share capital increase, performed pursuant to the given authorisations in provision 2.3, 2.4, 2.5 and 2.6, cannot exceed nominal DKK 25,000,000.

3.1 Each share of DKK 0.50 entitles the shareholder to one vote at the general meetings.

3.2 The shares shall be issued in the name of the holder and shall be recorded in the name of the holder in the Company's register of shareholders. The register of shareholders shall not be available for inspection by the shareholders unless otherwise prescribed by law.

3.3 The shares are negotiable instruments. No restrictions shall apply to the transferability of the

shares.

3.4 Ingen kapitalejer skal være forpligtet til at lade sine aktier indløse.

3.5 Ingen aktier har særlige rettigheder.

3.6 Selskabets aktier er registreret i den norske værdipapirsentral, Verdipapirsentralen ASA, og selskabet udsteder ikke fysiske ejerbeviser. Rettigheder vedrørende selskabets aktier skal anmeldes til Verdipapirsentralen ASA efter de herom fastsatte regler. Hvis selskabets aktier ophører med at være noteret på Oslo Aves, kan bestyrelsen beslutte, at selskabets aktier ikke længere skal være registreret i Verdipapirsentralen.

Elektronisk kommunikation

4.1 All kommunikation fra selskabet til de enkelte aktionærer, herunder indkaldelse til generalforsamlinger, kan ske elektronisk via offentliggørelse på selskabets hjemmeside og/eller ved udsendelse via e-mail. Generelle meddelelser gøres tilgængelige på selskabets hjemmeside og på sådan anden måde, som måtte være foreskrevet i henhold til lov. Selskabet kan til enhver tid vælge i stedet at fremsende meddelelser mv. med almindelig post.

4.2 Kommunikation fra aktionærer til selskabet kan ske ved e-mail eller ved almindelig post.

4.3 Selskabet anmoder de navnnoterede aktionærer om en

shares.

3.4 No shareholder is obliged to have his or her shares redeemed.

3.5 No shares carry any special rights.

3.6 The Company's shares are registered with the Norwegian securities centre, Verdipapirsentralen ASA, and the Company shall not issue any physical share certificates. All rights concerning the shares shall be notified to Verdipapirsentralen ASA in accordance with the applicable rules. If the Company's shares cease to be admitted to listing on the Oslo Aves, the Board of Directors may determine that the shares shall no longer be registered with Verdipapirsentralen.

Electronic Communication

4.1 All communication from the Company to the individual shareholders, including the convening of general meetings, may be sent electronically via publication on the Company's website and/or by sending email. General notices are available on the Company's website and in such other manner as may be prescribed by applicable laws. The Company may at all time choose to send notices, etc., by ordinary mail instead.

4.2 Communication from a shareholder to the Company may take place by email or by ordinary mail.

4.3 The Company shall request all shareholders registered by name to

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e-mail adresse, hvortil meddelelser mv. kan sendes. Det er den enkelte aktionær ansvar at sikre, at selskabet til stadighed er i besiddelse af korrekte oplysninger om e-mail adresse. Selskabet har ingen pligt til at søge oplysningerne berigtiget eller til at fremsende meddelelserne på anden måde.

4.4 Oplysningerne om kravene til de anvendte systemer samt om fremgangsmåden ved elektronisk kommunikation findes på selskabets hjemmeside, www.hugogames.com.

5. Generalforsamlinger

5.1 Generalforsamlingen er inden for de ved lovgivningen og vedtægterne fastsatte grænser den højeste myndighed i selskabet.

5.2 Selskabets generalforsamlinger afholdes i Region Hovedstaden (København) eller i Oslo.

5.3 Selskabets ordinære generalforsamling afholdes inden udgangen af april hvert år. Senest 8 uger før dagen for den påtænkte afholdelse af den ordinære generalforsamling offentliggør selskabet datoen for generalforsamlingen samt datoen for den seneste fremsættelse af krav om optagelse af et bestemt emne på dagsordenen.

5.4 Ekstraordinær generalforsamling afholdes, når bestyrelsen eller revisor forlanger det. Ekstraordinær generalforsamling skal endvidere afholdes, når det forlanges af aktionærer, der tilsammen ejer

submit an email address to which notices, etc., can be sent. Each shareholder is responsible for ensuring that the Company has the correct email address at all times. The Company is not obliged to verify such contact information or to send notices in any other way.

4.4 The Company's website, www.hugogames.com, contains information about system requirements and electronic communication procedures.

5. General Meetings

5.1 The general meeting is within the law and the Articles of Association laid down, the supreme authority of the Company.

5.2 The general meetings of the Company shall be held in the Capital Region of Denmark (Copenhagen), or in Oslo.

5.3 The annual general meeting of the Company shall be held before the end of April every year. No later than 8 weeks before the contemplated date of the annual general meeting, the Company shall publish the date of the general meeting and the deadline for submitting requests for specific proposals to be included on the agenda.

5.4 Extraordinary general meetings shall be held when determined by the Board of Directors or requested by the Company's auditor. Furthermore, an extraordinary general meeting shall be held when requested by

5.5 Generalforsamlinger indkaldes af bestyrelsen med mindst 3 ugers og højest 5 ugers varsel. Indkaldelsen offentliggøres på selskabets hjemmeside. Indkaldelsen sendes endvidere til alle i ejerbogen noterede aktionærer, som har fremsat begæring herom.

5.6 I indkaldelsen skal angives tid og sted for generalforsamlingen samt dagsorden, hvor af det fremgår, hvilke anliggender, der skal behandles på generalforsamlingen. Såfremt forslag til vedtægtsændringer skal behandles på generalforsamlingen, skal forslagets væsentligste indhold angives i indkaldelsen. Indkaldelse til generalforsamlingen, hvor der træffes beslutning efter selskabslovens § 77, stk. 2, § 92, stk. 1, eller § 107, stk. 1 eller 2, skal indeholde den fulde ordlyd af forslaget.

5.7 Senest 3 uger før enhver generalforsamling, inklusiv datoen for generalforsamlingens afholdelse skal følgende oplysninger gøres tilgængelige for aktionærerne på selskabets hjemmeside

a) Indkaldelsen
b) Det samlede antal aktier og stemmerettigheder på datoen

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for indkaldelsen
c) De dokumenter, der skal fremlægges på generalforsamlingen
d) Dagsordenen og de fuldstændige forslag
e) De formularer, der skal anvendes ved stemmeafgivelser pr. fuldmagt eller skriftligt ved brevstemme.

5.8 Enhver aktionær har ret til at få et bestemt emne behandlet på den ordinære generalforsamling. Begæring herom skal fremsættes skriftligt over for bestyrelsen senest 6 uger før generalforsamlingens afholdelse.

5.9 Dagsordenen for den ordinære generalforsamling skal omfatte følgende

a) Bestyrelsens beretning om selskabets virksomhed i det forløbne år
b) Fremlæggelse og godkendelse af revideret årsrapport, herunder fastsættelse af bestyrelsens honorar
c) Meddelelse af decharge til bestyrelsen og direktion
d) Anvendelse af overskud eller dækning af underskud i henhold til den godkendte årsrapport
e) Valg af medlemmer til bestyrelsen
f) Valg af revisor
g) Eventuelle forslag fra bestyrelsen eller aktionærer
h) Eventuelt

5.10 Generalforsamlingen ledes af en af bestyrelsen valgt dirigent. Dirigenten afgør alle spørgsmål vedrørende behandling af

voting rights on the date of the notice
c) The documents to be presented at the general meeting
d) The agenda and the complete proposals
e) The forms to be used for voting by proxy or voting by correspondence.

5.8 Every shareholder shall be entitled to have a specific subject considered at the annual general meeting. Such proposals must be submitted in writing to the Board of Directors not later than 6 weeks prior to the general meeting.

5.9 The agenda for the annual general meeting shall include the following

a) The Board of Directors' report on the Company's activities in the past year
b) Presentation and adoption of the audited annual report, including the determination of the remuneration for the Board of Directors
c) Discharge from liability of the Board of Directors and the Executive Management
d) Distribution of profit or loss as recorded in the adopted annual report
e) Election of members to the Board of Directors
f) Appointment of auditor
g) Any proposals from the Board of Directors or shareholders
h) Any other business

5.10 The general meeting shall be presided over by a chairman elected by the Board of Directors. The chairman shall decide all questions

dagsordenspunkterne, stemmeafgivning og resultaterne heraf.

5.11 Der føres en protokol over generalforsamlingen, der underskrives af dirigenten. Senest 2 uger efter generalforsamlingens afholdelse gøres protokollen eller en bekræftet udskrift af denne tilgængelig for aktionærerne på selskabets hjemmeside.

5.12 En aktionær's ret til at deltage i en generalforsamling og til at afgive stemme fastsættes i forhold til de aktier, aktionæren besidder på registreringsdatoen. Registreringsdatoen ligger en uge før generalforsamlingen. De aktier, den enkelte aktionær besidder, opgøres på registreringsdatoen på baggrund af notering af aktionærernes ejerforhold i ejerbogen samt eventuelle meddelelser om ejerforhold, som selskabet har modtaget med henblik på indførelse i ejerbogen, men som endnu ikke er indført i ejerbogen.

5.13 En aktionær, der er berettiget til at deltage i generalforsamlingen, og som ønsker at deltage i generalforsamlingen, skal senest 3 dage før dens afholdelse anmode om adgangskort.

5.14 En aktionær kan møde personligt eller ved fuldmægtig, og både aktionæren og fuldmægtigen kan møde med en rådgiver.

5.15 Stemmeret kan udøves i henhold til skriftlig og dateret fuldmagt i overensstemmelse med den til

regarding the business transacted the casting of votes and the results of voting.

5.11 Minutes of the proceedings of the general meeting shall be entered into a minute book to be signed by the chairman. The minutes or a certified copy of the minutes shall be available for inspection by the shareholders on the Company's website no later than 2 weeks after the general meeting.

5.12 The right of a shareholder to attend and vote at a general meeting is determined by the shares held by the shareholder at the record date. The record date is one week prior to the general meeting. The shares held by each shareholder at the record date is calculated based on the registration of the number of shares held by that shareholder in the Company's register of shareholders as well as on any notification of ownership received by the Company for the purpose of registration in the Company's register of shareholders, but which have not yet been registered.

5.13 A shareholder who is entitled to attend the general meeting and who wants to attend the general meeting shall request to receive an admission card not later than 3 days prior to the date of the general meeting.

5.14 A shareholder may attend in person or by proxy, and the shareholder or the proxy may attend together with an adviser.

5.15 The right to vote may be exercised by a written and dated instrument of proxy in accordance with applicable

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aniver tid gældende lovgivning herom. Stemmeseddel udøvet i henhold til fuldmagt skal forholde sig til de på dagsordenen individuelle punkter.

5.16 De på generalforsamlingen behandlede anliggender afgøres ved simpelt stemmeflertal blandt afgivne stemmer, medmindre andet følger af lovgivningen eller disse vedtægter.

5.17 Til vedtagelse af beslutning om vedtægtsændringer, selskabets opløsning, fusion, eller spaltning kræves, at beslutningen vedtages med mindst 2/3 af såvel de afgivne stemmer som af den på generalforsamlingen repræsenterede aktiekapital, med mindre der i medfør af lovgivningen stilles strengere eller lempeligere vedtagelseskrav eller tillægges bestyrelsen eller andre organer selvstændig kompetence.

5.18 Bestyrelsen kan beslutte, at der som supplement til fysisk fremmøde på generalforsamlingen gives adgang til, at aktionærerne kan deltage elektronisk i generalforsamlingen, herunder stemme elektronisk, uden at være fysisk til stede på generalforsamlingen.

5.19 Såfremt bestyrelsen udnytter sin ret efter punkt 5.18, skal indkaldelsen til den pågældende generalforsamling tillige indeholde information om

a) de elektroniske systemer, som anvendes,
b) hvordan aktionærerne tilmelder sig den elektroniske

laws. The voting paper practiced according to proxy shall deal with each item of the agenda individually.

5.16 Resolutions by the general meeting shall be passed by a simple majority of votes cast unless otherwise prescribed by law or by Articles of Association.

5.17 Adoption of changes of Articles of Association, dissolution of the Company, merger or demerger requires that the decision is adopted with at least 2/3 of the votes cast as well as the share capital represented at the general meeting, unless applicable laws prescribe stricter or less strict adoption requirements or applicable laws confer independent competence to the Board of Directors or other bodies.

5.18 The Board can decide to allow digital attendance to the general meeting as a supplement to the physical attendance, including the possibility of electronic voting without being physically present at the general meeting.

5.19 In case the Board carries out an electronic general meeting in accordance with provision 5.18, the notice convening the general meeting shall contain information on

a) The electronic systems to be used,
b) How the shareholders can sign up and gain access to the electronic

generalforsamling, og

c) hvor aktionærerne kan finde oplysning om fremgangsmåden i forbindelse med elektronisk deltagelse i generalforsamlingen.

Bestyrelse og direktion

6.1 Den overordnede ledelse af selskabets anliggender forestås af en bestyrelse bestående af 3-5 medlemmer som vælges hvert år på selskabets ordinære generalforsamling for perioden frem til næste ordinære generalforsamling. Genvalg kan finde sted.

6.2 Bestyrelsen vælger selv sin formand og næstformand.

6.3 Bestyrelsen er beslutningsdygtig, når over halvdelen af samtlige medlemmer er repræsenteret. Bestyrelsens beslutninger træffes ved simpelt flertal. Formandens stemme er afgørende ved stemmelighed.

6.4 Bestyrelsen vedtager en forretningsorden for sit arbejde, og det på bestyrelsesmødet passerede indføres som referat i forhandlingsprotokollen, som herefter underskrives af samtlige tilstedeværende bestyrelsesmedlemmer. Et tilstedeværende bestyrelsesmedlem, der ikke er enig i en beslutning, har ret til at få sin mening indført i forhandlingsprotokollen.

general meeting, and

c) Where the shareholders can find information on the procedure in connection to the electronic participation to the general meeting.

Board of Directors and Executive Board

6.1 The overall management of the Company's affairs is the responsibility of the Board of Directors consisting of 3-5 directors elected each year at the annual general meeting of the company for the period until the next annual general meeting. The directors are eligible for re-election.

6.2 The Board of Directors shall appoint its own chairman and vice-chairman.

6.3 The Board of Directors forms a quorum when more than half of all directors are represented. Board resolutions are adopted by simple majority. The chairman has the casting vote in case of equality of votes.

6.4 The Board of Directors shall adopt rules of procedure for its work, and minutes of the business transacted at Board meetings must be entered into the minute book which must then be signed by all directors present. A director who is present and is against the adoption of a resolution is entitled to have his or her opinion entered into the minute book.

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6.5 Bestyrelsen kan beslutte at kommunikere elektronisk ved afholdelse af bestyrelsesmøder, herunder ved telefonmøder. Bestyrelsen kan endvidere beslutte at afholde skriftlige bestyrelsesmøder, herunder ved e-mail.

6.6 Bestyrelsens medlemmer oppebærer et årligt honorar, der fastsættes af generalforsamlingen i forbindelse med godkendelsen af årsrapporten.

6.7 Et bestyrelsesmedlem kan ikke opstille til genvalg efter vedkommende er fyldt 70 år.

6.8 Bestyrelsen udnævner selskabets direktion, som består af 1-4 medlemmer, som er ansvarlige for selskabets daglige drift. Heraf udnævnes et medlem som administrerende direktør (Chief Executive Officer (CEO)).

6.9 Bestyrelsen har udarbejdet generelle retningslinjer for incitamentsafslønning af direktionen og medarbejdere. Disse generelle retningslinjer blev godkendt af selskabets generalforsamling den 15. april 2015, jf. § 139 i selskabsloven. De generelle retningslinjer er gjort tilgængelige for offentligheden på selskabets hjemmeside på www.hugogames.com.

Tegningsregel

7.1 Selskabet tegnes af den administrerende direktør og et bestyrelsesmedlem i forening eller af den samlede bestyrelse.

6.5 The Board of Directors may decide to communicate electronically through the holding of board meetings, including conference calls. The Board of Directors may also decide to hold written board meetings, including by email.

6.6 Directors receive an annual fee determined by the general meeting in connection with the approval of the annual report.

6.7 A Board member cannot apply for re-election from the time the person has reached the age of 70.

6.8 The Board of Directors appoints the Company's Executive Management, which consists of 1-4 members to be in charge of the day-to-day management of the Company. One of these members shall be appointed as Chief Executive Officer (CEO).

6.9 The Board of Directors has adopted overall guidelines for incentive remuneration of Directors and employees. These overall guidelines were approved by the Company's general meeting on 15 April 2015, cf. Section 139 of the Danish Companies Act. The overall guidelines are made available to the public on the Company's website, www.hugogames.com.

Power to Bind the Company

7.1 The Company is bound by the joint signatures of the chief executive officer and a member of the Board of Directors, or the joint signatures of

Ekstraordinært udbytte

8.1 Bestyrelsen, er bemyndiget til at træffe beslutning om uddeling af ekstraordinært udbytte i overensstemmelse med selskabslovens regler.

Revision

9.1 Selskabets regnskaber revideres af en af selskabets generalforsamling valgt statsautoriseret revisor. Revisor vælges for et år ad gangen. Genvalg kan finde sted. Som revisor kan vælges et revisionsselskab.

Regnskabsår m.v.

10.1 Selskabets regnskabsår løber fra 1. januar til 31. december.

10.2 Årsrapporten skal give et retvisende billede af selskabets aktiver og passiver, dets finansielle stilling samt resultater, jf. den til enhver tid gældende regnskabslovgivning.

Sprog

11.1 Selskabets koncernsprog er engelsk.

11.2 Generalforsamlinger afholdes på dansk og/eller engelsk efter bestyrelsens beslutning, uden at der samtidig gives mulighed for simultantolkning til og fra dansk for samtlige deltagere.

11.1 The Company's corporate language is English.

11.2 The language of the general meeting is Danish and/or English according to the decision of the Board of Directors without any option for simultaneous interpretation to and from Danish for all attendants.

all members of the Board of Directors.

Extraordinary Dividends

8.1 The Board of Directors is authorized to resolve on the distribution of extraordinary dividends in accordance with the rules of the Companies Act.

Auditing

9.1 The financial statements of the Company must be audited by an authorized auditor appointed at the general meeting. The auditor is appointed for one year at a time. The auditor is eligible for re-appointment. An auditing firm can also be appointed.

Financial Year, Etc.

10.1 The financial year of the Company runs from January 1 until December 31.

10.2 The annual report must provide a true and fair view of the assets and liabilities, the financial position and the results of the Company as set out in the financial statements legislation applicable at any time.

Language

11.1 The Company's corporate language is English.

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11.3 Selskabets årsrapport udarbejdes og aflægges på engelsk. Bestyrelsen kan beslutte, at årsrapporten tillige udarbejdes på dansk.

11.3 The Company's annual report is prepared and presented in English. The Board of Directors may decide that the annual report shall be prepared in Danish as well.

Således vedtaget på ekstraordinær generalforsamling den 6. februar 2015 og ændret ved den ordinære generalforsamling af 15. april 2015 samt ved bestyrelsesmøde den 18. juni 2015 og ekstraordinær generalforsamling den 6. januar 2016, bestyrelsesmøde den 26. januar 2016 og ekstraordinær generalforsamling den 20. juni 2016.

Adopted at the extraordinary general meeting on 6 February 2015 and amended at the annual general meeting of 15 April 2015, as well as the board meeting of 18 June 2015 and the extraordinary general meeting of 6 January 2016, the board meeting of 26 January 2016 and the extraordinary general meeting of 20 June 2016.

Som dirigent:

Chairman of the meeting:

Appendix 2 - Annual accounts 2014 and 2015 (IFRS)

Company information etc.	3
Statement by the Board of Directors and the Executive Board on the annual report	4
Independent auditor's reports	5–6
Management's review	7
Consolidated income statement and statement of comprehensive income	8
Consolidated balance sheet	9–10
Consolidated statement of changes in equity	11
Consolidated cash flow statement	12
Notes	13
Consolidated notes	14–39
Parent company accounting policies	40–41
Parent company income statement	42
Parent company balance sheet	43
Parent company notes	44–46

Hugo Games A/S

(Formerly Hasloo Games Holding ApS)

CVR no. DK 33 59 71 42

Annual report 2014

This annual report has been adopted at the company's annual general meeting on 7-Ag. 2015.

Chairman of the meeting:

Wage Games A/S

Company information etc.

The company

Hugo Games A/S
Gammel Kringveej 120, 1. th.
DK-1860 Frederiksberg C
CVR no.: DK 33 59 71 42

Board of Directors

Bertel David Maigaard, Chairman
Casper Boas
Rasmus Lund, lawyer
Christian Sand Kirk

Executive Board

Henrik Jørgen Skouboe Kølle
Peter Ekman

Auditors

INFO: REVISION
Ruddingsvej 312
DK-2860 Søborg
Thomas Bænlund, State-Authorised Public Accountant

Wage Games A/S

Statement by the Board of Directors and the Executive Board on the annual report

The Board of Directors and the Executive Board have today considered and adopted the annual report of Huge Games A/S for the financial year 1 January 2014 – 31 December 2014.

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as approved by the EU. The financial statements of the parent company, Hugo Games A/S, have been prepared in accordance with the Danish Financial Statements Act (Årengnskabsloven). Furthermore, the annual report has been prepared in accordance with the additional Danish disclosure requirements for annual reports of class B companies.

In our opinion, the accounting policies applied are appropriate, thus ensuring that the consolidated financial statements and the financial statements provide a fair presentation of the group's and the parent company's assets, liabilities and financial position as at 31 December 2014 and of the results of the group's and the parent company's operations and the consolidated cash flows for the financial year 1 January 2014 – 31 December 2014.

The annual report is submitted for adoption by the general meeting.

Copenhagen, 27 March 2015

Shage Games A/S

Independent auditor's reports

To the shareholders of Hugo Games A/S

REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENTS

We have audited the consolidated financial statements and the financial statements of Hugo Games A/S for the financial year 1 January 2014 – 31 December 2014, comprising the income statement, balance sheet, statement of changes in equity and rates for the group and the company as well as the consolidated statement of comprehensive income and the consolidated cash flow statement. The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as approved by the EIJ and additional Danish disclosure requirements, and the financial statements have been prepared in accordance with the Danish Financial Statements Act.

The Board of Directors' and Executive Board's responsibility for the consolidated financial statements and the financial statements

The management is responsible for the preparation of consolidated financial statements that provide a fair presentation in accordance with the International Financial Reporting Standards as approved by the EIJ and Danish disclosure requirements and for the preparation of financial statements that provide a fair presentation in accordance with the Danish Financial Statements Act. Furthermore, the management is responsible for the internal control deemed necessary by the management for preparing consolidated financial statements and financial statements that are free of material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on the consolidated financial statements and financial statements based on our audit. We conducted our audit in accordance with the International Auditing Standards and additional requirements pursuant to Danish regulations on auditors and audit firms. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the consolidated financial statements and the financial statements are free from material misstatement.

An audit involves performing audit procedures to obtain audit evidence of the amounts and disclosures in the consolidated financial statements and the financial statements. The audit procedures selected depend on the auditor's judgement, including the assessment of risks of material misstatement in the consolidated financial statements and the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the preparation of consolidated financial statements and financial statements that give a fair presentation. The purpose is to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. Furthermore, an audit includes an assessment of the accounting policies applied by the management, the accounting estimates made by the management and the overall presentation of the consolidated financial statements and the financial statements.

We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our audit opinion.

Our audit has not resulted in any qualifications.

Opinion

In our opinion, the consolidated financial statements provide a fair presentation of the group's assets, equity and liabilities and financial position as at 31 December 2014 and of the group's operations and cash flows for the financial year 1 January 2014 – 31 December 2014 in accordance with the International Financial Reporting Standards as approved by the EIJ and additional Danish disclosure requirements.

It is also our opinion that the financial statements provide a fair presentation of the company's assets, liabilities and financial position as at 31 December 2014 and of the company's operations for the financial year 1 January 2014 – 31 December 2014 in accordance with the Danish Financial Statements Act.

STATEMENT REGARDING THE MANAGEMENT'S REVIEW

We have read the management's review as required by the Danish Financial Statements Act. We have not performed procedures additional to the audit of the consolidated financial statements and the financial statements. Against this background, we believe that the information provided in the management's review is consistent with the consolidated financial statements and the financial statements.

Bate-Authorised Public Accountant

Wage-Dawson & G.

Management's review

Wage-Dawson & G.

Consolidated income statement and statement of comprehensive income

| Note | 2014
DEX '000 | 2013
DEX '000 |
| --- | --- | --- |
| Revenue | 6,344 | 5,372 |
| Cost of sales | 1,709 | 1,435 |
| Gross profit | 4,635 | 3,937 |
| Other external expenses | 5,474 | 2,922 |
| Staff expenses | 376 | 543 |
| Loss before depreciation, amortisation and impairment losses (EBITDA) | -1,215 | 472 |
| Depreciation and amortisation of property, plant and equipment and intangible assets | 3,406 | 1,434 |
| Operating loss (EBIT) | -4,711 | -962 |
| Financial income | 0 | 41 |
| Financial expenses | 317 | 199 |
| Loss before tax | -5,028 | -1,119 |
| Tax on loss for the year | -1,399 | -461 |
| Net loss for the year | -3,629 | -659 |
| Other comprehensive income | 0 | 0 |
| Comprehensive income | -3,629 | -658 |
| Distribution of comprehensive income | | |
| Parent company's shareholders | -3,629 | -658 |
| Non-controlling interests | 0 | 0 |
| Total | -3,629 | -658 |
| Earnings per share | | |
| Earnings per share (in DEX) | -450 | -90 |
| Diluted earnings per share (in DEX) | -450 | -90 |

Management's review

Main activity

The group's activities have mainly consisted in the development, sale and distribution of electronic entertainment, including electronic games, primarily games with the character "Hugo".

Developments in the group's and the company's business activities and financial situation

The group and the company recorded a loss after tax of DEX 3,629k and DEX 3,618k, respectively, which is found to be satisfactory considering the fact that the year's activities primarily consisted in developing new games for launch in the coming years.

The group's and the company's capital bases were strengthened by a total of DEX 27,033k during the year through a cash capital increase of the share capital of DEX 15,000k before costs incurred in connection with the capital increase and through a debt remission from the parent company in the amount of DEX 12,022k.

Events subsequent to the balance sheet date

In January 2015, the capital base was strengthened by DEX 5,750k in connection with a sale of treasury shares contributed by the parent company by way of a group contribution.

Apart from the above, no important events have occurred after the end of the financial year.

10
9
10

Mega Games A/S

Consolidated balance sheet

BUDGET AND LIABILITIES
Note	31/12/2014	31/12/2013	01/01/2013
	DEX '000	DEX '000	DEX '000
Share capital	10,000	80	80
Share premium	4,986	0	0
Retained earnings	21,998	13,505	14,163
Total equity	36,874	13,585	14,243
Provisions for deferred tax	3,638	1,786	0
Payables to credit institutions	6,697	0	0
Total non-current liabilities	10,335	1,786	0
Payables to credit institutions	671	0	9
Payables to group companies	10	11,291	0
Prepayments received from customers	94	0	230
Trade payables	1,828	2,342	322
Income tax payable	23	0	0
Other payables	1,108	2,427	2,277
Total current liabilities	3,934	16,060	2,838
Total liabilities	14,269	17,848	2,838
Total equity and liabilities	51,143	31,431	17,081

Mega Games A/S

Consolidated balance sheet

ASSETS
Note	31/12/2014	31/12/2013	01/01/2013
	DEX '000	DEX '000	DEX '000
Competent development projects	13,565	12,357	2,719
Acquired rights	97	0	0
Goodwill	762	762	762
Development projects in progress	21,074	13,071	7,838
Other plant, fixtures and fittings, tools and equipment	21	31	53
Deferred tax asset	0	0	251
Other receivables	77	57	50
Total non-current assets	35,596	26,276	11,072
Trade receivables	554	551	402
Receivables from group companies	698	2,550	2,500
Other receivables	307	833	584
Prepayments	2,128	720	0
Cash	11,958	90	1,943
Total current assets	15,547	5,153	5,408
Total assets	51,143	31,431	17,081

168

Mega Shares 4/8

Consolidated cash flow statement

| | 2014
DEX '000 | 2013
DEX '000 |
| --- | --- | --- |
| Loss before tax | -5,028 | -1,119 |
| Adjustment of non-cash transactions: | | |
| Depreciation, amortization and impairment losses | 3,496 | 1,434 |
| Financial income, reversed | 0 | -41 |
| Financial expenses, reversed | 317 | 198 |
| Change in working capital: | | |
| Receivables | 407 | -559 |
| Trade payables | -514 | 2,020 |
| Other receivables | 625 | -368 |
| Prepayments | -1,409 | -720 |
| Other payables | -1,319 | 150 |
| Prepayments received from customers | 94 | -230 |
| Cash flows from operating activities before net financials | -3,331 | 865 |
| Financial income received | 0 | 41 |
| Financial expenses paid | -57 | -198 |
| Tax paid | 0 | 0 |
| Cash flows from operating activities | -3,388 | 708 |
| Purchase of property, plant and equipment | -16 | 0 |
| Purchase of intangible assets | -12,778 | -16,084 |
| Purchase of investments | -20 | -57 |
| Sale of investments | 0 | 50 |
| Cash flows from investing activities | -12,814 | -16,291 |
| Proceeds from cash capital increase | 14,906 | 0 |
| Proceeds from raising of loss for credit institutions | 7,308 | 0 |
| Loans from group companies | 5,856 | 13,739 |
| Cash flows from financing activities | 28,070 | 13,739 |
| Total cash flows for the year | 11,868 | -1,844 |
| Cash, beginning of year | 90 | 1,834 |
| Cash, end of year | 11,958 | 90 |
| Cash, end of year, comprises: | | |
| Cash | 11,958 | 90 |
| Short-term payables to credit institutions | 0 | 0 |
| Total | 11,958 | 90 |

Mega Shares 4/9

Consolidated statement of changes in equity

Accounts in DEX '000	Share total	Share premium	Retained earnings	Proposed dividend	Total equity
Statement of changes in equity
01/01/2013 - 31/12/2013
Equity as at 31/01/2013	80	0	14,163	0	14,243
Net loss for the year			-858		-858
Other comprehensive income			0		0
Comprehensive income			-858		-858
Capital increase/reduction					0
Group contribution					0
Transactions with owners					0
Equity as at 31/12/2013	80	0	13,505	0	13,585
Statement of changes in equity
01/01/2014 - 31/12/2014
Equity as at 01/01/2014	80	0	13,505	0	13,585
Net loss for the year			-3,628		-3,628
Other comprehensive income			0		0
Comprehensive income			-3,628		-3,629
Cash capital increase	29	14,971			15,003
Costs of capital increase		-94			-94
Capital increase through transfer of reserves	8,891	-9,891			0
Group contribution through debt revenues			12,022		12,022
Group contribution in connection with purchase of treasury shares			4,980		4,980
Purchase of treasury shares			-5,000		-5,000
Transactions with owners	9,920	4,986	12,012		36,918
Equity as at 31/12/2014	10,500	4,986	21,888	0	36,874

Hugo Games A/S

Notes

Hugo Games A/S

Consolidated notes

Accounting policies
Significant accounting estimates and assessments
Segment information
Revenue
Staff expenses
Financial income
Financial expenses
Tax
Earnings per share
Intangible assets
Property, plant and equipment
Trade receivables
Equity
Payables to credit institutions
Contingent liabilities
Security provided
Operating lease commitments
Financial risks and financial instruments
Related parties
Events occurring after the balance sheet date
Adoption of the annual report for publication
The group's transition to IFRS
New accounting regulation
Accounting policies

Hugo Games A/S is a limited liability company domiciled in Denmark. The consolidated financial statements for 2014 have been prepared in accordance with the International Financial Reporting Standards (IFRS) as approved by the EU and additional Danish disclosure requirements for annual reports of class B companies.

Danish kroner (DKK) is the group's presentation currency and the functional currency of the parent company. The consolidated financial statements are presented in Danish kroner (DKK) rounded off to the nearest DKK 1,000.

Transition to IFRS

The consolidated financial statements of Hugo Games A/S for 2014 are the first to be prepared in accordance with IFRS. The effect of the transition to IFRS is described in note 22.

Consolidated financial statements

The consolidated financial statements comprise Hugo Games A/S (parent company) and the companies (subsidiaries) controlled by the parent company. A company is regarded as controlled by the parent company when the parent company is exposed or entitled to variable returns on its involvement in the company, and has the ability to affect those returns through its power over the company.

The consolidated financial statements are prepared based on the financial statements of Hugo Games A/S and its subsidiaries. The consolidated financial statements are prepared by combining items of a uniform nature calculated in accordance with the group's accounting policies, eliminating intercompany income and expenditure, intercompany balances and dividends as well as gains and losses on transactions between the consolidated companies.

Business combinations

Newly acquired or newly founded companies are recognized in the consolidated financial statements as from the time of acquisition and the time of foundation, respectively. The time of acquisition is the time at which control of the company is actually obtained. Divested or discontinued companies are recognized in the consolidated statement of comprehensive income up until the time when control ceases.

When new companies are acquired and the group obtains control of an acquired company, it is recognized in accordance with the acquisition method, according to which the newly acquired company's identifiable assets, liabilities and contingent liabilities are measured at fair value at the date of acquisition.

Wage Games A/S

Consolidated notes

Wage Games A/S

Consolidated notes

1. Accounting policies - continued -

The acquisition price of a company is the fair value of the price paid for the acquired company. Expenses relating to the acquisition are recognised in the income statement when paid.

Positive differences (goodwill) between the acquisition price of the acquired company on the one hand and the fair value of the assets, liabilities and contingent liabilities acquired on the other are recognised as goodwill and tested for impairment at least once a year.

Figures pertaining to business combinations carried out before 1 January 2013 have not been restated according to the above accounting policies in connection with the transition to presentation of the consolidated financial statements in accordance with IFRS. The carrying amount as at 1 January 2013 of goodwill in connection with business combinations carried out before 1 January 2013 is regarded as the cost of goodwill under IFRS, see note 22.

Foreign currency translation

On initial recognition, transactions in currencies other than the functional currency of the individual company are recognised at the exchange rate applicable at the transaction date. Receivables, payables and other monetary items denominated in foreign currency not settled at the balance sheet date are translated using the exchange rate applicable at the balance sheet date.

Exchange rate differences between the exchange rate applicable at the transaction date and the exchange rate at the date of payment and the balance sheet date, respectively, are recognised in the income statement as net financials. Property, plant and equipment and intangible assets, inventories and other non-monetary assets purchased in foreign currency and measured based on historical cost are translated at the exchange rate applicable at the transaction date.

Tax

Tax for the year, consisting of current tax and changes in deferred tax, is recognised in the income statement with the portion attributable to tax on the profit or loss for the year, and directly in equity or in other comprehensive income with the portion attributable to amounts recognised directly in equity or in other comprehensive income, respectively.

Current tax payables and receivables are recognised in the balance sheet as tax computed on the basis of the taxable income for the year and taxes paid or refunded.

Current tax for the year is computed based on the tax rules and tax rates applicable at the balance sheet date.

1. Accounting policies - continued -

Deferred tax is recognised using the balance sheet liability method on the basis of all temporary differences between the carrying amounts and tax losses of assets and liabilities, except for deferred tax on temporary differences due to either initial recognition of goodwill or initial recognition of a transaction that is not a business combination, and where the temporary difference ascertained at the time of initial recognition does not affect either the tax results or the taxable income. The deferred tax is calculated based on the planned use of the individual asset or settlement of the individual liability.

Deferred tax is measured applying the tax rules and tax rates expected to be applicable when the deferred tax is expected to crystallise as current tax. Any change in deferred tax as a result of changes in tax rules or rates is recognised in the income statement, unless the deferred tax is attributable to transactions that have previously been recognised directly in equity or in other comprehensive income. In the latter case, the change is recognised directly in equity or in other comprehensive income, respectively.

Deferred tax assets, including the tax value of tax losses allowed for carryforward, are recognised in the balance sheet at the expected realisable value, either through offsetting against deferred tax liabilities or as a net tax asset for offsetting against future positive taxable incomes. An assessment is made on each balance sheet date of whether it is probable that sufficient taxable income will be generated in future to enable utilisation of the deferred tax asset.

The group is subject to joint taxation. The current Danish income tax is allocated between the jointly taxed companies in proportion to their taxable incomes.

Statement of comprehensive income

Revenue

Revenue from sales of games and in-app purchases is recognised in the income statement if delivery has taken place and the risk has passed to the purchaser before the balance sheet date, and the revenue can be determined reliably and is expected to be received. For sales of games and in-app purchases where delivery takes place via third parties (platform distribution partners), Hugo Games A/S is the primary contractual party for the users and fixes the prices. Sales of games and in-app purchases are consequently measured as the fee paid by the user for the delivery, while costs for the third party are recognised under cost of sales.

Hope Games A/S
Consolidated notes

1. Accounting policies – continued –

Income from the provision of advertising services is recognised as revenue as the agreed services are provided. For sales of advertising services provided via third parties (platform distribution partners), Huge Games A/S is the primary contractual party for the users and fixes the prices. Income from advertising services is consequently measured exclusive of costs for such third parties.

Revenue is measured at the fair value of the fee received or receivable and is stated exclusive of VAT and discounts.

External expenses

Other external expenses comprise expenses relating to marketing, administrative expenses, costs of premises, bad debts, operating losses etc.

Staff expenses

Staff expenses comprise wages and salaries as well as social security expenses, pensions for group staff and other staff-related expenses.

Net financials

Net financials comprise interest income and expenses as well as realised and unrealised gains and losses on transactions in foreign currency.

Amortisation of capital losses and borrowing costs relating to financial liabilities is recognised on an ongoing basis as part of the interest expenses.

Balance sheet

Goodwill

On initial recognition, goodwill is recognised and measured as the difference between the cost of the acquired company and the fair value of the assets, liabilities and contingent liabilities acquired, see the description in the section on business combinations.

On initial recognition, goodwill is distributed on the group activities that generate independent cash flows (cash-generating units). The distribution on cash-generating units follows the management structure and the group's internal financial management.

Goodwill is not amortised, but is lasted for impairment at least once a year.

1. Accounting policies – continued –

Development projects

Development costs comprise staff expenses and fees for subsuppliers directly attributable to the development of new games. Development projects which are clearly defined and whose technical feasibility and sufficiency of resources have been demonstrated and which the company intends to complete and market are recognised as development projects in the balance sheet if the cost can be determined reliably and there is sufficient certainty that the future earnings will cover the development costs. Recognised development projects are measured at cost less accumulated amortisation and impairment losses.

Other development costs are recognised in the income statement under other external expenses or staff expenses as the costs are paid.

Once completed, development projects are amortised according to the straight-line method over their estimated useful lives from the time when the asset is ready for use. Development projects relating to a game are regarded as being ready for use at the time when the game is launched and made available to the users at the latest. The first launch may be either a soft launch whose main purpose is to gain experience about user preferences and behaviour in the game with a view to making improvements, or a hard launch where the main purpose is to generate commercial income. The amortisation period is usually 5 years from soft launch and 3 years from hard launch. Amortisation methods, useful lives and residual values are reviewed every year.

Property, plant and equipment

Property, plant and equipment are measured in the balance sheet at the lower of cost less accumulated depreciation and recoverable amount.

Cost comprises the acquisition price, costs directly related to the acquisition and costs for preparation of the asset until such time as the asset is ready for use. The depreciation period is usually 3-5 years. Depreciation methods, useful lives and residual values are reviewed every year.

Non-current financial assets

Other receivables recognised under non-current assets comprise deposits and are measured at the lower of accumulated cost and recoverable amount.

Impairment of assets (impairment test)

The carrying amount of property, plant and equipment and intangible assets with determinable useful lives are tested for impairment every year. If indications of impairment are found, the recoverable amount of the asset is calculated to determine the need to write down for impairment and the amount of such impairment loss, if relevant.

Wage Shares A-B

Consolidated notes

Wage Shares A-B

Consolidated notes

1. Accounting policies - continued -

The recoverable amount of development projects in progress and goodwill are determined every year, regardless of whether any indications of impairment exists.

If an asset does not produce inflows independently of other assets, the recoverable amount is determined for the smallest cash-generating unit of which the asset forms part.

The higher of fair value loss selling costs and value in use is used as the recoverable amount of the asset. The value is use is determined as the present value of the expected net cash flows from use of the asset. If the recoverable amount of the asset is lower than the carrying amount, the carrying amount is written down to the recoverable amount.

In so far as cash-generating units are concerned, the impairment loss is distributed in such a way that goodwill is written down for impairment first, and subsequently any remaining need for impairment is distributed on the other assets in the unit. However, individual assets cannot be written down to a value lower than fair value loss expected selling costs. Impairment losses are recognised in the income statement.

Receivables

Receivables comprise trade receivables and other receivables. Receivables are included in the category loans and receivables, which are financial assets with fixed or determinable payments that are not listed in an active market and are not derivative financial instruments. On initial recognition, receivables are measured at fair value and subsequently at amortized cost, which usually corresponds to the nominal value, less write-downs for bad debts.

Any write-downs for bad debts are determined on the basis of an individual assessment of the individual receivable.

Prepayments

Prepayments recognised under assets comprise costs incurred in respect of the subsequent financial year. Prepayments are measured at cost.

Dividend

Dividend is recognised as a liability at the time of adoption by the general meeting.

1. Accounting policies - continued -

Treasury shares

Acquisition costs and consideration for treasury shares and dividend from such are recognised directly in equity under retained earnings.

Liabilities

Non-current liabilities comprise other credit institutions. Payables to credit institutions are measured at cost at the time of contracting such payables biasing of loans. Subsequently, the liabilities are measured at amortized cost, meaning that the difference between the proceeds from the loan and the repayable amount is recognised in the income statement over the period of the loan as a financial expense according to the effective interest method.

Other financial liabilities comprise bank debt, trade payables, other payables to public authorities and other liabilities. On initial recognition, other financial liabilities are measured at fair value loss any transaction costs. Subsequently, the liabilities are measured at amortized cost according to the effective interest method, so that the difference between the proceeds and the nominal value is recognised in the income statement as a financial expense over the period of the loan.

Cash flow statement

The cash flow statement shows cash flows from operating, investing and financing activities as well as cash at the beginning and end of the year.

Cash flows from operating activities are presented in accordance with the indirect method and are determined as the operating profit or loss adjusted for non-cash operating items, changes in working capital and paid financial income, financial expenses and income tax.

Cash flows from investing activities comprise payments in connection with the acquisition and sale of companies and financial assets as well as the purchase, development, improvement and sale of property, plant and equipment and intangible assets.

Cash flows from financing activities comprise changes in the parent company's share capital and associated costs as well as the raising and repayment of loans, the repayment of interest-bearing debt, the purchase and sale of treasury shares and the payment of dividends.

Cash flows in currencies other than the functional currency are recognised in the cash flow statement using average exchange rates, unless they deviate significantly from the actual exchange rates at the transaction dates.

Cash and cash equivalents comprise cash less overdraft facilities that are an integrated part of the cash management.

Wogel-Hansen & M

Consolidated notes

Wogel-Hansen & M

Consolidated notes

2. Significant accounting estimates and judgements

In connection with the preparation of the consolidated financial statements, the management makes a number of accounting estimates and assessments that affect the recognised values of assets, liabilities, income, expenses and cash flows as well as their presentation.

Accounting estimates reflect the management's best estimates in terms of amounts where the measurement is subject to uncertainty, typically because the estimate is based on assumptions concerning future events. The accounting estimates are based on historical experience and other assumptions deemed relevant, but the actual results may, naturally, deviate from the estimates made. The estimates are regularly reassessed, and the effect of changes is recognised in the consolidated financial statements.

Accounting judgements reflect decisions made by the management as to how the accounting policies are applied in specific situations where the accounting treatment depends on qualitative assessments. Examples could be when the risk passes or how a certain transaction or turn is best presented to provide reliable and relevant information.

The following accounting estimates and judgements have had significant impact on the consolidated financial statements for 2014:

Amortisation of development projects

To reflect the use of the development projects in the form of amortisation, the time when the asset is ready for use and the expected useful life must be determined. Generally, development projects are amortised from the time when the game is first made available to the users. Reference is made to the presentation in the accounting policies.

Impairment test

For use in connection with the impairment test, the management has distributed property, plant and equipment and intangible assets on cash-generating units or groups of cash-generating units generating inflows which are largely independent of other assets or groups of assets.

Development projects concerning various games are regarded as one cash-generating unit if the games are predominantly based on the same development work. Basic development projects on which all the group's games are based are categorised in the group of cash-generating units that make up the entire group. The distribution of assets on cash-generating units is described in note 18.

3. Segment information

The group consists of one operating segment.

Geographic distribution

All intangible assets and property, plant and equipment are located in Denmark. The group primarily sells its products through third parties (plethora distribution partners). The most important single countries are Denmark and Germany. For 2014, revenue totalled DKK 1,378k (2013: DKK 3,113k) in Denmark, and DKK 846k (2013: DKK 824k) in Germany. No individual customer accounted for more than 10% of the group's revenue in 2014. In 2013, one individual customer accounted for DKK 640k of the group's revenue, corresponding to more than 10% of revenue.

	2014	2013
	DKK 100	DKK 100

4. Revenue

Revenue is distributed as follows:

Sales of games and in-app purchases	5,213	4,685
Sales of services (advertising services)	874	92
Licence income	257	585
Total	6,344	5,372

174

	2014	2013
	DKK '000	DKK '000
5. Staff expenses
Wages and salaries	5,299	6,381
Pensions	370	352
Other social security expenses	201	283
Total	5,670	7,016
Total staff expenses are recognised as follows:
Staff expenses in the income statement	376	543
Development projects	5,494	6,473
Total	5,670	7,016
Average number of employees in the year	11	13
Remuneration for key management employees:
Parent company's Board of Directors, fee	0	0
Parent company's Executive Board, short-term employee benefits	942	953
Parent company's Executive Board, pension	0	0
Total remuneration for key management employees	942	953

Financial income

Interest income on assets measured at amortized cost	0	41
Foreign exchange gains, net	0	0
Total	0	41

	2014	2013
	DKK '000	DKK '000
7. Financial expenses
Interest expenses on liabilities measured at amortized cost	217	188
Exchange rate loss, net	0	0
Total	217	188

Tax on loss for the year:
Current tax	23	0
Change in deferred tax	1,852	2,039
Tax received under the tax credit scheme/joint taxation contributions
	-3,274	-2,500
Tax on loss for the year:	-1,388	-461

Reconciliation of effective tax rate:

Tax computed on the loss before tax at a tax rate of 24.5% / 25.0%	-1,232	-280
Effect of changed tax rate in Denmark	-116	-48
Tax value of non-deductible expenses	15	4
Other adjustments	-66	-137
Effective tax rate (27.8% / 41.2%)	-1,389	-461

Deferred tax is made up as follows:

Amounts in DKK '000	31/12/2014	31/12/2013	01/01/2003
Intangible assets	7,942	5,963	2,223
Property, plant and equipment	-74	-101	-100
Tax losses carried forward	-4,130	-4,095	-2,374
Total deferred tax	3,638	1,786	-251

which is distributed as follows:

Deferred tax assets	0	0	251
Deferred tax liabilities	3,638	1,786	0
Total	3,638	1,786	-251

175

174

175

Consolidated notes

2014	2013
DEK '000	DEK '000

9. Earnings per share

Net loss for the year	-3,629	-658
Average number of shares	8,163	7,345
Average number of treasury shares	-94	0
Average number of shares in circulation	8,069	7,345
Diluted average number of shares in circulation	8,069	7,345
Earnings per share of DEK 1,000 each (in DKK)	-450	-50
Diluted earnings per share of DEK 1,000 each (in DKK)	-450	-50

10. Intangible assets

Amounts in DEK '000	Completed development projects	Acquired rights	Goodwill	Development projects in progress	Total
Financial year 2014
Cost as at 31/01/2014	14,143	0	762	13,071	27,876
Additions during the year	4,075	100	0	8,003	12,778
Disposals during the year	0	0	0	0	0
Cost as at 31/12/2014	18,818	100	762	21,574	40,754
Amortization and impairment losses as at 31/01/2014	1,786	0	0	0	1,786
Impairment losses during the year	0	0	0	0	0
Amortization during the year	3,467	3	0	0	3,470
Amortization and impairment losses as at 31/12/2014	5,253	3	0	0	5,258
Carrying amount as at 31/12/2014	13,985	87	762	21,574	35,498

10. Intangible assets - continued

Amounts in DEK '000	Completed development projects	Acquired rights	Goodwill	Development projects in progress	Total
Financial year 2013
Cost as at 01/01/2013	3,092	0	762	7,839	11,692
Additions	10,710	0	0	6,674	16,284
Disposals	0	0	0	0	0
Translated to completed development projects	341	0	0	-341	0
Cost as at 31/12/2013	14,143	0	762	13,071	27,876
Amortization and impairment losses as at 01/01/2013	373	0	0	0	373
Impairment	0	0	0	0	0
Amortization	1,413	0	0	0	1,413
Amortization and impairment losses as at 31/12/2013	1,786	0	0	0	1,786
Carrying amount as at 31/12/2013	12,357	0	762	13,071	26,190

Impairment lost

Cash-generating units comprising goodwill and development projects in progress are tested for impairment at least once a year and more frequently in case of indications of impairment.

The recoverable amount is determined at a calculated value in use based on budgets and progresses for the coming 2 financial years approved by the Board of Directors.

The group's budgets and progresses for the coming 2 years and thus the determination of the recoverable amount of the cash-generating units are substantially impacted by the management's expectations for growth in connection with the launch of new games.

Wage Games A/S

Consolidated notes

10. Intangible assets - continued -

Key assumptions for the determination of the recoverable amount of the cash-generating units are the expected number of daily users (Daily Action Users or DAU) of the individual games calculated 120 days after hard launch and the average revenue per daily active user (Average Revenue Per Daily Active User or ARPDAU). The key figures are stated 120 days after launch of the individual games during the period 2015-17.

As a consequence of the expectation that most of the revenue from new games is realised within 3 years of their launch, neither the discount rate nor growth during the terminal period represent significant assumptions in respect of the recoverable amount. The uncertainty associated with the determination of the recoverable amount is primarily believed to relate to DAU, as ARPDAU is based on historical experience. The average ARPDAU is DKK 0.24 - 0.33 for all periods. Budgets approved by the management express the following expectations for the cash-generating units:

Super casual games comprise 3 games with expected hard launch in 2015 and 2016, which are included in capitalised development costs as at 31 December 2014 (2 games as at 31 December 2013 and 1 game at 1 January 2013).
Casual/sims games comprise 3 games with expected hard launch in 2015 and 2016, which are included in capitalised development costs as at 31 December 2014 (1 game as at 31 December 2013 and 1 game as at 1 January 2013).
Strategy games comprise 1 game with expected hard launch in 2017, which is included in capitalised development costs as at 31 December 2014, as at 31 December 2013 and as at 1 January 2013.

DAU after 120 days (in thousands)	31/12/2014	31/12/2013	01/01/2013
Super casual games	1,480	840	190
Casual/sims games	770	360	280
Strategy games	290	390	290
Huge Games group	3,530	1,360	740

The management has assessed that reasonably probable changes in the key assumptions will not lead to impairment.

Consolidated notes

10. Intangible assets - continued -

Distribution of intangible assets on cash-generating units:
Amounts in DKK '000	Completed development projects	Acquired rights	Goodwill	Development projects in progress	Total
31/12/2014
Super casual games	3,492	0	0	5,258	7,761
Casual/sims games	6,217	0	0	1,841	8,058
Strategy games	4,534	0	0	0	4,534
Huge Games group	0	0	762	13,974	14,736
Other units	232	97	0	0	429
Total	13,565	97	762	21,074	35,498
31/12/2013
Super casual games	3,184	0	0	1,450	4,034
Casual/sims games	4,390	0	0	0	4,390
Strategy games	4,034	0	0	0	4,034
Huge Games group	0	0	762	11,631	12,383
Other units	749	0	0	0	749
Total	12,307	0	762	13,071	26,180
01/01/2012
Super casual games	1,731	0	0	0	1,731
Casual/sims games	0	0	0	141	141
Strategy games	0	0	0	200	200
Huge Games group	0	0	762	7,407	8,259
Other units	988	0	0	0	988
Total	2,719	0	762	7,938	11,319

Wogel-Hansen & M

Consolidated notes

Property, plant and equipment

Amounts in DKK '000	Other fixtures and fittings, tools and equipment	Total
Financial year 2014
Cost as at 01/01/2014	68	68
Additions	16	16
Cost as at 31/12/2014	84	84
Depreciation and impairment losses as at 01/01/2014	37	37
Depreciation	26	26
Depreciation and impairment losses as at 31/12/2014	63	63
Carrying amount as at 31/12/2014	21	21
Financial year 2013
Cost as at 01/01/2013	68	68
Additions	0	0
Cost as at 31/12/2013	68	68
Depreciation and impairment losses as at 01/01/2013	16	16
Depreciation	21	21
Depreciation and impairment losses as at 31/12/2013	37	37
Carrying amount as at 31/12/2013	31	31

Trade receivables

	21/12/2014 DKK '000	31/12/2013 DKK '000	01/01/2013 DKK '000
Gross receivable	564	961	402
Provision for losses	0	0	0
Total	564	961	402
Due receivables not written down:
Overdue, less than 30 days	0	0	0
Overdue, more than 30 days	0	0	0
Total	0	0	0

Equity

Share capital
The company's share capital consists of 10,000 shares of DKK 1,000 each. The shares are fully paid in. The shares are not divided into classes, and no shares enjoy special rights.

Treasury shares
The group's holding of treasury shares, nominally DKK 850k, corresponds to 8.5% of the parent company's share capital. The holding comprises 850 shares of DKK 1,000 each.

Capital management
The group aims to ensure structural and financial flexibility as well as competitive strength. For that purpose, the group regularly assesses what the appropriate capital structure for the group is.

Dividend
It is proposed that no dividend be paid.

Wage Games A/S

Consolidated notes

Payables to credit institutions

Amounts in DKK '000	Foreign currency	Term to maturity	Interest	Carrying amount	Fair value
Payables to credit institutions as at 31/12/2014
The Danish Growth Fund, Vækst-fonden, floating-rate loan	DKK	4.5 years	6.9%	7,568	7,760
Total as at 31/12/2014				7,568	7,760

In addition to interest, the Danish Growth Fund is entitled to a performance bonus, if the company realizes a position EBITDA. No performance bonus is recognised for 2014.

Methods and assumptions for the determination of fair value

Floating-rate payables to credit institutions are measured at nominal value.

Contingent liabilities

The group companies are taxed jointly with the other companies in the AOLA Holding ApS group, and, as from the 2013 financial year, they have joint and several and unlimited liability together with the other jointly taxed companies for the total income tax and any obligations to withhold tax at source on interest, royalties and dividends for the jointly taxed companies.

The total tax liability for the jointly taxed companies at the balance sheet date has not yet been computed. For further information, please see the administration company AOLA Holding ApS's financial statements.

The liability also includes any subsequent corrections to the calculated tax liability as a consequence of changes made to the jointly taxable income etc.

An agreement has been concluded with subsuppliers for the development of games, which include provisions on profit sharing of future income from games.

Security provided

As security for payables to credit institutions of DKK 7.571k, the subsidiary has provided a company charge of DKK 7.500k comprising goodwill, intellectual property rights, trade receivables, inventories, other plant, fixtures and fittings, tools and equipment. The total carrying amount of the comprised assets is DKK 36,046k.

Operating lease commitments

	31/12/2014 DKK '000	31/12/2013 DKK '000	01/01/2013 DKK '000
The group has concluded operating leases in respect of office premises. The leases are based on fixed lease payments, which are index-adjusted once every year. The leases are non-terminalable.
The total, future minimum lease payments are distributed as follows:
Within 1 year	298	398	0
1-5 year(s)	0	298	0
After 5 years	0	0	0
Total	298	696	0
Operating lease payments recognised in the income statement amount to	509	661	-

Financial risks and financial instruments

Risk management policy

The group's financial risks are managed by the Executive Board. The group has not prepared particular policies for the identification and handling of risks. The management of the group's risks is included in the Executive Board's day-to-day monitoring of the group.

Interest rate risk

All other things being equal, a reasonably probable higher interest rate level compared with the interest rate level at the balance sheet date would have the following hypothetical effect on the loss for the year and the equity at year-end:

Amounts in DKK '000	2014		2013
	Income statement	Equity	Income statement	Equity
The Danish Growth Fund, Vækstfonden, floating-rate loan	-62	-62	-	-
Total	-62	-62	-	-

Wage Games A/S

Consolidated notes

18. Financial risks and financial instruments – continued –

A reasonably probable lower interest rate level compared with the interest rate level at the balance sheet date would have a similar, opposite effect on the loss for the year and equity.

Assumptions for sensitivity analysis:

Sensitivities are based on the recognised financial liabilities as at 31 December 2014.
The sensitivity is based on a change of 1% in CIROR 3 months.
The above changes are regarded as reasonably probable based on the current market situation and expectations for the market development in the interest rate level.

Currency risk

The group is not subject to material currency risks.

Credit risk

The maximum credit risk relating to receivables corresponds to the carrying amount. Information about trade receivables due appears from note 12. The group is not subject to material credit risks.

Liquidity risk

The group's liquidity risk covers the risk that the group is not able to meet its liabilities as they fall due.

The maturities of financial liabilities appear from the tables below. All amounts are contractual cash flows, i.e. inclusive of interest.

Amounts in DEK '000	Within		Over
	1 year	1-2 year(s)	2-5 years	5 years
As at 31/12/2014
Other credit institutions	1,137	2,274	5,694	0
Trade payables	1,927	0	0	0
Other payables	1,108	0	0	0
Total	4,072	2,274	5,694	0

As at 31/12/2013

Trade payables	2,342	0	0	0
Other payables	2,427	0	0	0
Payables to group companies	11,281	0	0	0

Total 16,060 0 0 0 16,060

19. Related parties

Ownership

The parent company A/S.A Holding ApS, Vitus Berings Allé 16, DK-2000 Klampenborg, exercises control of Hugo Games A/S, as the company holds the majority of the voting rights.

Shareholders holding more than 5% of the share capital or the voting rights:

A/S.A Holding ApS, 62.45%
HKGO NewHeld ApS, 36.55%
Hugo Games A/S, treasury shares 8.5%

Other than the capital increase and group contribution, there were no related-party transactions.

Equity investments in other companies

Name	Registered office	Ownership interest
Subsidiaries
Hugo Games Development ApS (Formerly Hugo Games ApS)	Frederiksberg	100%
Insoff Interactive A/S	Frederiksberg	100%

Transactions with key management employees

Remuneration for the management is disclosed in note 5. There were no other transactions with key management employees.

Transactions with other related parties

There were no transactions with other related parties.

20. Events occurring after the balance sheet date

In January 2015, the capital base was strengthened by DEK 5,750k in connection with a sale of treasury shares contributed by the parent company by way of a group contribution.

Apart from the above, no important events have occurred after the end of the financial year.

Wraps Games A/S

Consolidated notes

21. Adoption of the annual report for publication

At the board meeting on 27 March 2015, the Board of Directors adopted this annual report for publication. The annual report will be presented to Hugo Games A/S's shareholders for approval at the annual general meeting on 15 April 2015.

22. The group's transition to IFRS

The consolidated financial statements for 2014 are the first consolidated financial statements to be prepared in accordance with IFRS as approved by the IFS and additional Danish disclosure requirements for annual reports of class B companies, as the group companies only prepared separate financial statements according to the provisions of the Danish Financial Statements Act up until and including the 2013 financial year. Regardless of the fact that consolidated financial statements have not previously been prepared, the effect of the transition to IFRS for the group is shown in the tables below.

The IFRS opening balance sheet as at 1 January 2013 and the comparative figures for 2013 have been prepared in accordance with IFRS, including the transitional provisions of IFRS 1 "First-time adoption of IFRS". The accounting policies are based on the accounting standards and interpretations in effect as at 31 December 2014. The IFRS opening balance sheet as at 1 January 2013 has been prepared as if IFRS had always been applied, except for the transitional provisions in IFRS 1. The following transitional provisions have been applied:

IFRS 3 Business combinations is not applied to business combinations carried out before the IFRS opening balance sheet as at 1 January 2013. The carrying amount of goodwill according to the previous practice, DKK 763k, is consequently used in the IFRS opening balance sheet as at 1 January 2013. The group carried out an impairment test of goodwill as at 1 January 2013.

The cash flow statement is not affected by the transition to IFRS.

23. The group's transition to IFRS - continued -

Effect of transition to IFRS for the income statement for 2013

New	Amounts in DKK '000	Previous practice	Effect of transition	IFRS
	Revenue	5,372	0	5,372
	Cost of sales	1,435	0	1,435
	Gross profit	3,937	0	3,937
	Other external expenses	2,500	0	2,500
	Staff expenses	543	0	543
	Loss before depreciation, amortisation and impairment losses (EBITDA)	474	0	474
A	Depreciation and amortisation of property, plant and equipment and intangible assets	1,627	-191	1,436
	Operating loss (EBIT)	-1,153	191	-962
	Financial income	41	0	41
	Financial expenses	198	0	198
	Loss before tax	-1,310	191	-1,119
	Tax on loss for the year	-461	0	-461
	Net loss for the year	-949	191	-658

181

Mugui Shaman & Co

Consolidated notes

The group's transition to IFRS - continued -

Effect of transition to IFRS for the balance sheet as at 1 January 2013

Amounts in DEK '000	Previous practice	Effect of transition	IFRS
ASSETS
Completed development projects	2,719	0	2,719
Goodwill	762	0	762
Development projects in progress	7,938	0	7,938
Other plant, fixtures and fittings, tools and equipment	52	0	52
Other receivables	50	0	50
Total non-current assets	11,421	0	11,421
Trade receivables	402	0	402
Receivables from group companies	2,500	0	2,500
Other receivables	584	0	584
Deferred tax asset	251	0	251
Cash	1,943	0	1,943
Total current assets	5,000	0	5,000
Total assets	17,081	0	17,081
EQUITY AND LIABILITIES
Share capital	80	0	80
Retained earnings	14,163	0	14,163
Total equity	14,243	0	14,243
Provisions for deferred tax	0	0	0
Total non-current liabilities	0	0	0
Payables to credit institutions	9	0	9
Prepayments received from customers	230		230
Trade payables	322	0	322
Other payables	3,277	0	3,277
Total current liabilities	2,838	0	2,838
Total equity and liabilities	17,081	0	17,081

Mugui Shaman & Co

Consolidated notes

The group's transition to IFRS - continued -

Effect of transition to IFRS for the balance sheet as at 1 January 2013

Amounts in DEK '000	Previous practice	Effect of transition	IFRS
ASSETS
Completed development projects	12,367	0	12,367
Goodwill	571	191	762
Development projects in progress	13,071	0	13,071
Other plant, fixtures and fittings, tools and equipment	31	0	31
Other receivables	57	0	57
Total non-current assets	26,087	191	26,279
Trade receivables	981	0	981
Receivables from group companies	2,050	0	2,050
Other receivables	832	0	832
Prepayments	720	0	720
Cash	80	0	80
Total current assets	5,153	0	5,153
Total assets	31,240	191	31,431
EQUITY AND LIABILITIES
Share capital	80	0	80
Retained earnings	13,314	191	13,505
Total equity	13,394	191	13,585
Provisions for deferred tax	1,788	0	1,788
Total non-current liabilities	1,786	0	1,786
Payables to group companies	11,291	0	11,291
Trade payables	2,342	0	2,342
Other payables	2,427	0	2,427
Total current liabilities	16,000	0	16,000
Total equity and liabilities	31,240	191	31,431

Wage Games A/S

Consolidated notes

Wage Games A/S

Parent company accounting policies

22. The group's transition to IFRS - continued -

Correction of development projects

In the above outline, errors are corrected in the consolidated financial statements under the previous practice in connection with the measurement of development projects, primarily because development projects were not amortised from the time when they were ready for use. The correction has led to a reduction of development projects in the opening balance sheet as at 1 January 2013 by DKK 388k and as at 31 December 2013 by DKK 3,527k as well as derived tax effects.

Note A

According to the previous practice, goodwill is amortised over 5 years. According to IFRS, goodwill is not amortised, but is tested for impairment every year (impairment test).

23. New accounting regulation

IASB has published a number of new and changed accounting standards and interpretations, which are not mandatory for the preparation of the consolidated financial statements for 2014. The management has launched an assessment of the impact of IFRS 9 on financial instruments (effective date 1 January 2016, not yet approved by the IGI) and IFRS 15 on revenue recognition (effective date 1 January 2017, not yet approved by the IGI) on the future financial reporting. The other standards are not expected to have any substantial impact on the group.

The financial statements of the parent company Hugo Games A/S have been prepared in accordance with the provisions of the Danish Financial Statements Act on class B companies.

The financial statements are presented in Danish kroner (DKK).

The parent company's accounting policies have been applied consistently with last year.

Changes in accounting estimates and errors

In correction with the group's transition to IFRS, the company has ascertained the existence of errors, which has caused correction of fundamental errors in previously presented annual reports:

In previous financial years, no adjustment was made of intercompany profits on the company's equity investments in group companies. The effect of the fundamental error on equity as at 1 January 2013 has been calculated at DKK 433k, while the profit after tax for 2013 has been reduced by DKK 696k. Equity investments in group companies have been reduced by DKK 1,020k as at 31 December 2013.
In previous years, development projects in subsidiaries were not amortised from the time when they were ready for use. The effect of the fundamental error on equity as at 1 January 2013 has been calculated at DKK 433k, while the profit after tax for 2013 has been reduced by DKK 696k. Equity investments in group companies have been reduced by DKK 1,106k as at 31 December 2013.

Differences in relation to the group's accounting policies

The parent company applies the same accounting policies for recognition and measurement as the group with the exceptions and additions appearing below. For a complete description of the parent company's accounting policies, please see note 1 to the consolidated financial statements.

Income statement and balance sheet

Equity investments in subsidiaries

Equity investments in subsidiaries are recognised in the balance sheet at the proportionate share of the companies owned adjusted for any residual value of positive or negative goodwill as well as unrealised intercompany profits and losses.

Profits or losses in subsidiaries are recognised in the income statement in proportion to the shares equivalent to the equity investments.

Wragg-Warner & Co

Parent company accounting policies

Newly acquired or newly founded enterprises are recognised in the financial statements as from the time of acquisition. Companies divested or discontinued are recognised until the date of divestment.

Newly acquired companies are recognised in accordance with the acquisition method, according to which the identifiable assets and liabilities of the newly acquired companies are recognised at fair value at the time of acquisition.

The goodwill (positive difference) determined at the time of acquisition is recognised under equity investments in subsidiaries and amortised according to the straight-line method based on an individual assessment of the useful life of the asset, the maximum period, however, being 20 years.

Cash flow statement

No cash flow statement is prepared for the parent company, as the parent company is included in the consolidated cash flow statement, see Section 86(4) of the Danish Financial Statements Act.

Wragg-Warner & Co

Parent company income statement

| Note | 2014
DKK '000 | 2013
DKK '000 |
| --- | --- | --- |
| Other external expenses | 13 | 14 |
| Staff expenses | 0 | 0 |
| Loss before depreciation, amortisation and impairment losses | -13 | -14 |
| Depreciation, amortisation and impairment of property, plant and equipment and intangible assets | 0 | 0 |
| Operating loss | -13 | -14 |
| Income from equity investments in group companies | -3,808 | -838 |
| Other financial income | 0 | 0 |
| Other financial expenses | 0 | 0 |
| Total net financials | -3,808 | -838 |
| Loss before tax | -3,821 | -852 |
| Tax on loss for the year | -3 | -3 |
| Net loss for the year | -3,818 | -849 |
| Proposed distribution of net loss | | |
| Dividend for the financial year | 0 | |
| Retained earnings | -3,818 | |
| Total | -3,818 | |

184

Meyer-Hansen & M

Parent company balance sheet

ASSETS
	31/12/2014	31/12/2013
	DKK '000	DKK '000
Acquired rights	0	0
Total intangible assets	0	0
Equity investments in group companies	21,629	13,415
Total investments	21,629	13,415
Total non-current assets	21,629	13,415
Receivables from group companies	14,677	0
Deferred tax asset	9	6
Total receivables	14,886	6
Cash	1	1
Total current assets	14,887	7
Total assets	36,516	13,422

EQUITY AND LIABILITIES

Share capital	10,000	80
Share premium	4,986	0
Reserve for net revaluation according to the equity method	0	0
Retained earnings	21,508	13,315
Total equity	36,494	13,395
Trade payables	12	12
Payables to group companies	10	15
Total current liabilities	22	27
Total liabilities	22	27
Total equity and liabilities	36,516	13,422

Contingent liabilities
Security provided

Parent company notes

	2014	2013
	DKK '000	DKK '000
1. Tax
Current tax for the year	0	0
Change in deferred tax	-3	-3
Total tax for the year	-3	-3
Tax comprises:
Tax on loss for the year	-3	-3
Tax on changes in equity	0	0
Total	-3	-3

Investments

	31/12/2014
	DKK '000
Cost as at 31/12/2014	14,527
Additions during the year (group contribution)	12,022
Disposals during the year	0
Cost as at 31/12/2014	28,549
Impairment losses as at 31/12/2014	-731
Less before amortisation of goodwill during the year	-3,618
Reversal of revaluations relating to disposals during the year	0
Impairment losses as at 31/12/2014	-4,349
Amortisation of goodwill as at 31/12/2014	-381
Amortisation of goodwill during the year	-180
Reversal of amortisation relating to disposals during the year	0
Amortisation of goodwill as at 31/12/2014	-571
Carrying amount as at 31/12/2014	21,629

46
47

3. Equity

Amounts in DEE '000	Share total	Share premium	Reserves for net revaluation according to the equity method	Retained earnings	Total
Balance as at 31/01/2013	80	0	1,245	13,585	14,910
Correction of fundamental errors			-666		-666
Purchase/sale of treasury shares
Foreign currency translation adjustment of equity investments
Capital increase/reduction
Payment of share capital
Proposed distribution of net loss			-579	-270	-849
Balance as at 31/12/2013	80	0	0	13,315	13,385
Balance as at 31/01/2014	80	0	0	13,315	13,385
Purchase/sale of treasury shares
Group contribution				12,021	12,021
Cash capital increase	29	14,877			14,908
Capital increase through transfer of reserves	9,991	-9,891			0
Group contribution in connection with purchase of treasury shares				4,990	4,990
Purchase of treasury shares				5,000	5,000
Proposed distribution of net loss				-3,818	-3,818
Balance as at 31/12/2014	10,000	4,986	0	21,508	26,494

Share capital movements during the financial year and the 4 preceding financial years: DEE '000

Foundation of company, 2011	80
Cash capital increase, 2014	29
Capital increase through transfer of reserves, 2014	9,991
Balance as at 31/12/2014	10,000

The share capital consists of 10,000 shares of nominally DEE 1,000 each.

Reference is also made to note 12 in the consolidated financial statements.

Table of contents

Our Vision

To become a Nordic tier-one mobile game company by end 2018

Management's review
Hugo Games At-A-Glance	3
CEO Letter: Positive expectations but at a lower level	4 - 5
Mobile Games trends 2016	6 - 7
Our Three Fold Strategy	8 - 10
Outlook: Less aggressive and less risk minded guidance for 2016	11
Financial Review: Investments in future growth	12 - 13
Key figures	14
Risk management in practice	15
Hugo Games organisational chart	16
Good Corporate Governance is essential for long term value creation	17 - 18
Board of Directors and Executive Board	19 - 21
Shareholder Information	22 - 23
Statement by the Board of Directors and the Executive Board on the annual report	24
Independent auditor's reports	25 - 26
Financial Statements
Consolidated statement of profit and loss and other comprehensive income	27
Consolidated balance sheet	28 - 29
Consolidated statement of changes in equity	30
Consolidated cash flow statement	31
Notes to the financial statement	32 - 58
Parent company	59 - 64

Huggo

Conquering the World

Hugo Games Annual Report 2015

Management's review
Management's review

HUGO GAMES AT-A-GLANCE

A Nordic, publicly traded game mobile game company founded in 2011.
A company that creates, develops and publishes mobile games globally.
Having a strong portfolio of games globally available across a wide range of platforms including iOS, Android, Windows, Amazon and Facebook
Are truly passionate about games and committed to making titles that will engage and bring genuine joy to people for years.
Forms strategic partnerships with high profile celebrities for increased visibility, awareness and product performance.

7 Released Products

Hugo Bette Marini (2011)
Hugo Troll Race (2011)
Hugo Weed (2011)
Hugo Troll More (2011)
Cristiano Ronaldo: SuperSkiers (2011)
Aver in Face 2 (2014)
Hugo Troll Race 2 (2015)

6 Products in Development

Hugo Flowery Fash
Cristiano Ronaldo
KiKiNi'Riot
Power Goose: Ultimate
Nyjah Huston: SuperSkiers
Hugo Nordic
Fashion Fabulous

8 Product Releases in 2016

Aver in Face 2 (01)
Hugo Troll Race 2 (01)
Hugo Flowery Fash (02)
Ronaldo: KiKiNi'Riot (02)
Power Goose: Ultimate (02)
Nyjah Huston: SuperSkiers (04)
Hugo Nordic (04)
Fashion Fabulous (04)

Visible on All Major Platforms

Apple Key Gamer
Google Play Gamer
Amazon App Store
Windows Store
Facebook Games

Diverse Game Genre Portfolio

Eudora Runner
Tower Collapse
Maxi3v3
City Builder

Proprietary Technology

DigitGarter™
Hugo™

Our ambition

We are determined to provide exceptional gaming experiences that PEOPLE recommend to family and friends, EMPLOYEES are proud of and INVESTORS seek for long-term returns

CEO LETTER

Positive expectations, but at a lower level

For Hugo Games, the year 2015 was an important year in preparing the company for future growth. Following the IPO on the Oslo Axess Stock Exchange, the organisation was strengthened and many resources were invested in the expansion of the product portfolio.

Our 2015 results were not satisfactory due to low performance of the Ronaldo Superstar game. An important lesson was learned; only to use the celebrity DNA in their natural environment.

Although we have adjusted our guidance for the year to a less aggressive and less risk minded level – we are excited about the upcoming releases in 2016 – transforming an operating loss (EBITDA) in 2015 into operational profit in 2016.

Building a robust pipeline for future success

Expanded product- and portfolio

2016 offers our strongest product line-up ever. With 2 titles released globally already in Q1 2016, whereas Axe in Face 2 currently performs below expected, however Hugo Troll Race 2 shows initially good performance figures. We're of course expectant and excited about our remaining six product releases throughout 2016.

Having executed our three-fold product strategy by spreading market and product risk across several IP's and game concepts, it is important to mention that Hugo still plays a major role in our product portfolio. Having successfully released Hugo Troll Race 2, early March 2016, we're now looking forward to our next release, Hugo Flower Flush, tapping into the highly successful match-3 game category, where games like the Candy Crush Series are generating massive revenues. In fourth quarter we will release Hugo Nordic, a city builder game taking place in a Nordic medieval environment.

2016 is also the year where we release two new celebrity titles, celebrating our cooperation with social media phenomenon and football legend Cristiano Ronaldo as well as global skateboard champion, Nyjah Huston. Having learned from our earlier celebrity releases, we now ensure that each celebrity title will have a solid concept foundation within Cristiano Ronaldo's football universe and Nyjah Huston's skateboarding world respectively.

Hugo-Games Annual Report 2015
Hugo-Games Annual Report 2015

Management's review
Management's review

Looking into new celebrity partnerships for added visibility and growth

One leg of our three-fold product strategy as well as an ongoing strategic consideration in terms of social awareness, visibility and marketing expansion, is to utilize concept- and product development with celebrity brands by entering into agreements with socially strong celebrity's in areas where concept, game and IP makes a natural fit.

In 2015 we signed an agreement with Cristiano Ronaldo and we feel comfortable that our new football flavoured game with Ronaldo will benefit a lot from the impressive momentum Ronaldo is experiencing on social media with more than 200 million football-loving followers.

Our latest partnership with the world's greatest skateboarder, Nyjah Huston, winner of Street League Skateboard series in 2010, 2012, 2014 and 2015 follows the same strategy in signing up a celebrity with a recognized brand, a large identified audience and a global social reach. We will continue to strategically analyse and identify celebrities in order to enter into cooperate with high impact individuals securing increased awareness and PR in areas where IP and concept makes the above described natural fit.

On track towards our 2018 vision

We will continue to work dedicated towards our vision and we are confident that the future will bring success. Strong growth rates across all relevant mobile platforms in a market that continues to exceed expectations in terms of users and revenues. This growth combined with our experienced team, product portfolio, development strategy and celebrity partnerships, is all key factors that will make Hugo Games reach revenue and earnings targets for the period up to 2018.

With the above in mind we are aware that mobile gaming will remain one of the most competitive markets in the world, but we are determined that we will reach our vision set forth by end 2018.

We will continue to nurture and strengthen our competencies and company individuals while looking for ways to improve quality and securing a fast "go-to-market" lead time and we will also use our learnings, insight and experience from the mobile gaming market to secure a continued development of new, innovative and successful games in the time to come.

Last but not least, I would like to thank our employees and supportive investors. I am looking forward to keep you updated on the further development of Hugo Games.

MARKET SITUATION

MOBILE GAMES TRENDS 2016

Strong increase in number of app downloads, accelerated app maturity and growing marketing cost drives a steady stream of excellent mobile game concepts across a rich array of continuously better mobile devices and faster networks. Utilising our strong relationship with leading platform owners in order to get our titles features is key.

Looking back at 2015, we believe that many of the most relevant and impactful game concepts will define and redefine what the mobile gaming market will look like in 2016. From iOS's amazing success in China to Google Play's driving force across many emerging markets, we see how these two platforms are shaping categories, monetization and new device platforms. At the same time the games category continues to drive huge volumes of downloads and store revenue, yet we are seeing new trends emerge as smaller developers similar to Hugo Games, being able to challenge top publishers.

Emerging markets show strong grow rates

In 2015 Google Play experienced a massive increase in downloads driven by first-time device owners in emerging markets like Argentina, Mexico, Turkey, India, Thailand and Vietnam. This growth opens up new channels and new markets by targeting unmet needs of players in a given region. Meanwhile, app revenue increased notably year over year as iOS cemented its position as app store revenue king.

In 2014, app analytics company AppAnnie, noted a 60% download lead of Google Play over iOS. This widened to nearly 100% in 2015 (source: AppAnnie). This massive disparity could mark the beginning of changes in mobile marketing, including substantial increases of Android's share of mobile ad spend.

Google Play's significant increase in worldwide downloads came largely from emerging markets where the top five contributors were India, Indonesia, Turkey and Mexico. Together, these countries accounted for nearly half of Google Play's year-on-year download growth.

Both Google Play and Apple App Store made considerable gains in revenue, although iOS continued to outpace Google Play.

iOS enjoyed strong growth driven by China, the US and Japan, which contributed nearly 90% of the iOS App Store's year-on-year revenue growth. China saw especially impressive growth in App Store revenue, a fact that Apple called out in its Q4 earnings call. The relative contributions of games and apps did not deviate from their 2014 levels; games continued to contribute 90% of revenue on Google Play and 75% on the iOS App Store.

Henrik Kalle
CEO, Hugo Games A/S
Hugo-Games Annual Report 2015
Hugo-Games Annual Report 2015

Management's review
Management's review

Games are maturing at a faster rate

Although the individual apps leading the revenue charts remained relatively steady in 2015, beneath the surface there have been massive shifts in the mobile gaming market. Games are maturing at a faster rate, while mobile gaming revenue has become less concentrated. This presents opportunities for publishers who can effectively navigate this changing landscape, but also presents challenges for those that cannot.

According to app analytics company, AppAnnie, who recently analysed the average estimated time to maturity for new games, the time has dropped 60% from 2014 to 2015 — from being almost 50 weeks to just over 17. Compared to just three years prior, this is a remarkably slim window in which to generate downloads. For games released in 2012, average time to maturity was over 10 times longer than it was for those released in 2015.

The above naturally impacts marketing and monetization strategies as publishers seek high visibility and engagement upon release. It also has significant ramifications for portfolio management, with most publishers requiring more frequent releases to maintain the momentum that may have been sustained by a single title in previous years.

Meanwhile, as game revenue grows, it is also becoming less concentrated among the top publishers. Even as the biggest names in mobile gaming draw attention with multi-million-dollar ad campaigns and high-profile releases, the concentration of revenue in the mobile gaming market has been trending toward less concentration at the top.

Put together, these trends show an interesting picture of the mobile gaming market. On the one hand, smaller publishers like Hugo Games, has an opportunity to take up a greater slice of the market. On the other, the prospect of long-term success with just one or two games continue to become less realistic for most publishers. With a timeframe of roughly four months after launch until downloads start to dry up, broader product portfolio, fast development cycles and continued innovation are necessary to see success in an increasingly less concentrated and higher paced space. Increased marketing spend, press and public interest are likely to drive shorter maturity cycles still, while rising competition is likely to further fragment the revenue concentration in mobile games.

STRATEGY & GOALS

OUR THREE FOLD STRATEGY

When planning for the future we always utilize our learnings from the past, before executing our strategy with consistency and focus which we believe is our key to success.

Our long term goals in becoming a tier-one mobile company implies having a positive cash flow and more than five million active users (DAU's) with an average revenue per active daily user (ARPDAU) of at least 0.15 DKK.

On the path of becoming a Nordic tier-one mobile company

The company's long-term strategy and goal is to become a Nordic tier-one mobile company within the next three years.

Mobile gaming is expected to be the biggest part of the digital game business, as the sector is expected to grow from USD 35 billion in 2016 to USD 48 billion by 2020. That amounts to a change from 39 percent of the market in 2016 to 42 percent of the business by 2020. Overall, that is a Compound Annual Growth Rate of 8 percent CAGR (source: Digi-Capital) for mobile games, in which we believe that we have the skills and strategy to become a Nordic tier one mobile company. Our own tier-one definition/target is as follows:

To have at least five million daily active users (DAU's) by the end of 2018.
To have an average net revenue per daily active user of at least 0.15 DKK.
To reach a positive cash flow.
To obtain as much predictability in product performance and financial results as possible.

The above definition is a continuation of our earlier stated "3-fold strategy" where we will produce a sizeable amounts of games within three main pillars:

Focus on core competences.
Identifying and creating new and viable game concepts to select from.
Further develop the best concepts into content based on market demands.
Secure product visibility through marketing activities, hereunder PR, user acquisition, cross-promotion and app store features.
Turn product strategy into successful products.
Minimizing the market risk by developing and/or acquiring games on different levels:
Hugo Branded games utilizing Hugo's DNA within a conceptual safe concept environment
Acquiring brands and content by constantly analysing the market and identifying potentially successful and relatively low cost 3rd party IPs and game concepts
Utilizing Celebrity brands by entering into agreement with socially strong celebrity's where game concept and IP makes a natural fit.
Build a profitable and successful business
Retain ownership of successful products.
Maximize relationships with partners
Maintain a flexible and capital efficient model

Hugo-Games Annual Report 2015
Hugo-Games Annual Report 2015

Management's review

Through execution of the above strategy, we aim to secure a broad product portfolio, that will minimize the market risk and ensure the strategic strength and flexibility needed in the dynamic gaming industry.

Focused development strategy

Our execution strategy includes powerful in-house developed techniques and long term planning in the different tasks of concept and product development, securing a broad product portfolio, which will help ensure strategic strength and flexibility.

Having 5 titles released prior to 2016, 2 titles released in Q1 2016, 6 titles currently under development and aiming at a total of 13 titles globally available by end 2016 as well as knowing that maturity cycles are getting shorter makes focused development key.

We only develop games that:

Are attractive to a measurable segment of people.
We are really excited about.
Have a long life expectancy on the market.

When looking at acquiring content or IP's, we look for- and analyse on existing product metrics coupled with actual marketing effort to identify low performing products with untapped potential – if optimized and marketed correctly. These products are generally developed by smaller companies with little or no experience in product optimization and user acquisition.

Hugo Games 2016 release-plan

One title was released in 2015; Super Star Skater, featuring Cristiano Ronaldo. Unfortunately, the title failed in terms of expectations towards number of users and revenues generated, leaving out the otherwise high expectations towards the Ronaldo brand. However, learning from the app-analytics received a change of concept and product strategy was agreed in collaboration with Ronaldo's team, whereas Hugo Games are now allowed to make a much more dedicated and dominant Ronaldo product, including more football themes and football content. The new title is set for release in 2016. Another promising title in development is our upcoming skateboard game featuring worldwide skateboard champion Nyjah Huston, winner of the Street League Skateboard Series in 2010, 2012, 2014, and 2015.

Our employees are Hugo Games unique assets

In order to further support this strategy, we have strengthened the company's organizational team on several key positions, hereunder but not limited to a Chief Operating Officer, a Game Studio Lead and a Digital Marketing Manager; and we will continue to strengthen the organization at an appropriate pace.

Employees combined, Hugo Games represents more than 100 years of game industry experience.

Hugo Games Annual Report 2015

RELEASED PRODUCTS

WE ONLY DEVELOP GAMES THAT ARE ATTRACTIVE TO A MEASURABLE SEGMENT OF PEOPLE

Hugo Retro Mania was the first Hugo app-title released by Hugo Games Development ApS. Hugo Retro Mania was originally released in November 2011 but is still going strong with more than 45,000 daily active users (DAU's). Hugo Retro Mania debuted at number one in 11 countries and made it into the top 10 in other countries. Since then Hugo Retro Mania has been downloaded more than 10 million times. Current status: having been release in 2011, Retro Mania is still enjoying more than 10,000 daily active users across all platforms.

Hugo Troll Race Classic was the second Hugo app-title released in July 2012 with a number one ranking in 25 countries and with more than 1 million downloads in just three days. Since then and with limited marketing efforts, the game has been downloaded more than 10 million times proving that Hugo here to stay. Current status: Troll Race Classic is still doing well with more than 20,000 daily active user across all platforms.

Hugo World was released in 2013 and was originally meant to be a content mix between the city-builder category games HayDay and Dragondale, combining their mechanics to ensure player engagement. However, the content learning curve proved too challenging and Hugo World was re-balanced to accommodate a more casual gameplay. Current status: Being within the city-builder game category Hugo World has a steady base of loyal users playing every day.

Hugo Troll Wars was launched late 2013 as a multi-platform strategy game covering all viable mobile platforms, iOS, Android, Amazon, Windows and Facebook. Hugo Troll Wars was initially launched exclusively on Amazon with 14 days' sales period securing Hugo Troll Wars features on select Amazon devices such as Kindle Fire and Kindle FireHD. Current status: Unfortunately, a wrong development platform was chosen for Hugo Troll Wars, making updates and new features very difficult to implement why further development has been stopped. However, the title will continue to be available as Troll Wars is still being played by many people.

Ronaldo: Super Skater was released in June 2015 and quickly reached more than 7 million downloads thus proving how strong combining a well know IP with a game can be. However, it was learned that when utilizing a socially strong IP it is important to make a concepts and game the a true to the fans of the IP. Current status: Having learned to keep celebrity concepts in line with the DNA of the actual IP further development on the title has been halted, but a new and more streamlined football related concept with Ronaldo is scheduled for release in Q2 2016: Ronaldo Kick & Run.

Axe in Face 2 was successfully released in February 2016, and being a much anticipated sequel to the original Axe in Face, winner of Best Nordic Handheld Game in 2011, expectations was somewhat high. Current status: Axe in Face 1 is doing well in terms of daily active users and more importantly the player retention seems to be as expected.

Troll Race 2 is the sequel to the original Troll Race which is still a very popular title. Troll Race 3 was released beginning of March 2016 where it was featured by both Apple and Google resulting in more than 1,000,000 downloads in the first week. Current status: All data on Hugo Troll Race 2 are still looking very promising.

Hugo-Games Annual Report 2015

Management's review

OUTLOOK

LESS AGGRESSIVE AND LESS RISK MINDED GUIDANCE FOR 2016

To reduce the company's business risk, management has adjusted Hugo Games marketing strategy. Revenue and operating results have been adjusted accordingly to a revenue of DKK 20-25m (from DKK 35-43m) and an Operating Result before special items of DKK 3-7m (from DKK 5-12m). In 2016 we are turning an operational loss (EBITDA) in 2015 into an operational profit.

Having had just a single release in 2014-15, and looking forward to eight releases in 2016 as well as enjoying the in-game company of worldwide celebrity, football legend Cristiano Ronaldo and worldwide skateboard champion Nyjah Huston, we are naturally excited about 2016.

Different marketing strategies can be employed launching new games. Following a thorough review of the Hugo Games marketing strategy, the management has decided that a more defensive approach reducing the company's business risk would be preferable. Going forward, Hugo Games aims to be featured on the right platforms rather than pay for generated downloads through affiliates.

New financial guidance for 2016

	Users		Net revenue		EBITDA
	1000 daily active users		1000 DKK		1000 DKK
Q1 2016	85	- 104	505	- 618	-2.882	- -2.936
Q2 2016	343	- 419	3.421	- 4.181	-826	- -231
Q3 2016	576	- 704	6.694	- 8.182	2.364	- 3.686
Q4 2016	783	- 956	9.870	- 12.063	4.451	- 6.448
2016 total			20.490	- 25.044	3.107	- 6.967

Financial guidance announced on 6 January 2016

	Users		Net revenue		EBITDA
	1000 daily active users		1000 DKK		1000 DKK
Q1 2016	277	- 338	2.887	- 3.528	-3.165	- -2.544
Q2 2016	652	- 796	6.751	- 8.252	-1.310	- 89
Q3 2016	1.022	- 1.249	11.008	- 13.454	3.239	- 5.563
Q4 2016	1.366	- 1.669	14.778	- 18.062	6.305	- 9.371
2016 total			35.424	- 43.296	5.069	- 12.479

FINANCIAL REVIEW

INVESTMENTS IN FUTURE GROWTH

2015 was a year of investments. Both in terms of expansion of the product portfolio, building the organization and the new status as a listed company. Hugo Games 2015 results was not satisfactory, primarily due to the Ronaldo Superstar game that did not meet our expectations and which deprived both top- and bottom line.

Disappointing sign up rates

Hugo Games only launched one new game title in 2015, Ronaldo Superstar. The launch in June 2015 did not reach the expected success and an important lesson was learned; only to link the iconic Cristiano Ronaldo to football related concepts. Revenue in 2015 was DKK 3.2m down from 6.3m in 2014. Revenues was primarily generated from previously developed games, such as Hugo World and Hugo Troll Race Classic.

Cost base affected by large investments

The operational cost base increased significantly in 2015 due to the strategic marketing decisions, hereunder the cooperate with Cristiano Ronaldo.

Operational Costs (DKK '000)	2015	2014
Cost of sales	1,326	1,709
Other external expenses	14,811	5,474
Staff expenses	3,088	379
Total	19,825	7,559

Other external expenses covering marketing and administration accounted for DKK 14.8 in 2015 compared to DKK 5.5m in 2014. The y-o-y increase of DKK 9.3m is mainly due to an increase in marketing expenses launching Ronaldo Superstar and administrative expenses associated with the IPO in June 2015 as well as costs related to being a listed company.

In 2015, Hugo Games organization was strengthened considerably in key positions as a part of the professionalization of the company. Staff expenses excluding capitalized developments costs increased from DKK 0.4 in 2014 to DKK 3.7m in 2015. Up to 2015 almost all staff expenses were related to the development of games and backend systems and thus activated under development projects in progress. In 2015 significant resources has been spent on the IPO process, preparing marketing strategy and general management in optimizing development costs.

The average number of employees in 2015 was 11 (2014: 11). At the end of 2015 the number of employees was 15 (2014: 9).

The full effect of the investments will be visible in the fiscal year of 2016 and forward.

Financial performance was not satisfactory

EBITDA before special items was a loss of DKK 16.6m in 2015 (2014: DKK 1.2m). The lower EBITDA was a consequence of the necessary investments in upgrading the organisation, product development and marketing carried out.

Hugo Games Annual Report 2015

Hugo-Games Annual Report 2015

Management's review
Management's review

Special items of DKK 5.9m affected the results negatively. The costs were related to the listing of the company, which in accordance with IAS 32.38 has to be assigned to the income statement.

Depreciation and impairment for 2015 was DKK 11.4 million (2014: DKK 3.5 million). The increase was related to the depreciation of Ronaldo Superstar and the large backend system, which is the basis for a faster, cheaper and more effective development and management of games going forward. Furthermore, a game has been written off by DKK 3.5m, because Apple no longer supports the platform and a conversion to another platform no longer was economically profitable.

EBIT for 2015 was a loss of DKK 33.9m (2014: a loss of DKK 4.7m).

Net financials were an expense of DKK 3.2m (2014: DKK 0.3m) of which DKK 2.6m is related to an exchange loss of NOK. The proceeds from the IPO were paid in NOK and shortly after the exchange rate dropped. Hugo Games had to record a loss of DKK 2.6m of which DKK 1.2m has not yet been realized.

In 2015 Hugo Games incurred a loss before tax of DKK 37.1m (2014: a loss of DKK 5.0m). Tax on the loss for the year was an income of DKK 7.7m of which DKK 4.2m will be paid back from the Danish tax authorities as tax credit scheme.

A net loss for the year of DKK 29.4m was recorded (2014: a net loss of DKK 3.6m).

Total assets increased in 2015

Total assets amounted to DKK 63.2m at 31 December 2015, a DKK 12.1m or 24% increase compared to 2014. Investments in non-current assets amounted to a total of DKK 42.7m in 2015 (2014: DKK 35.6m). The investments include the completion of Ronaldo Superstar development project.

Cash flow hit by large investments and sales shortfall

In 2015 the cash flow from operating activities totalled a loss of DKK 21.4m (2014: loss of DKK 3.3m) and cash flow from investing activities (mainly game development) had a negative cash impact of DKK 17.5m (2014: DKK 12.8m). Cash flow from financing activities totalled DKK 43.7m primarily due to IPO proceeds. Cash position at 31 December 2015 amounted to DKK 14.6m (2014: DKK 12.0m).

Equity

The Group's equity at 31 December 2015 was DKK 52.1m (2014: DKK 36.9m). The increase in equity was mainly attributable to the successful IPO. The equity ratio at year-end was 82% (2014: 72%).

Q4 development

The development in Q4 2015 was characterized by strong development activity in relation to the launch of new games in 2016. In Q4 revenue amounted to DKK 0.6m and EBITDA before special items was a loss of DKK 4.6m. Other expenses have been negative impacted of accruals of costs related to the Ronaldo agreement. Depreciations, amortization and impairment losses has been impaired due the fact that a Hugo Games has been written down to a value of zero. In Q4 there has been no losses on foreign currency.

Events after the balance sheet date

No significant events have occurred after the balance sheet date that affect the 2015 annual report.

Hugo Games Annual Report 2015

KEY FIGURES

DKK '000	IFRS	IFRS	ÅRL
	2015	2014	2013
Revenue	3,198	6,344	4,549
Loss before special items depreciation, amortisation and impairment losses	-16,627	-1,215	474
Operating profit/loss	-33,909	-4,711	-1,153
Net financials	-3,213	-317	-156
Net loss for the year	-29,431	-3,629	-849
Total assets	63,240	52,143	31,241
Investments in property, plant and equipment	64	16	0
Capitalized development costs	17,259	12,678	12,778
Equity	52,055	36,874	13,394

Management's review

RISKS AND UNCERTAINTIES

RISK MANAGEMENT IN PRACTICE

Risk management is highly prioritized at Hugo Games. The Board of directors and management are monitoring the company's risk factors closely to minimize risk exposure. This ensures quick reaction time if conditions change. In every major decision, a risk assessment is made.

Hugo Games most important risks are related to market/commercial risks and development risks. However, where the conventional game development is associated with large risks due to long development periods with substantial associated costs and high risk of failure, Hugo Games' code engines reduces the development time and risk of failure significantly.

Financial risks
Hugo Games is in a development stage and do not yet generate positive cash flow. Therefore, the company depended of credit facilities and/or new capital from owners.
Market/commercial risks
For every launch of new games there is a risk that it does not generate satisfying downloads and revenue and the decision can be to stop the game or stop updating it and the amount spend for development costs and other costs will be written down with a negative consequence for the result for the period. To reduce the risk all new games run a soft launch period in a limited market to test the response from users to optimize the game.
Product development risks
When developing new products there is a risk that the product will not be finished because of for example change of market sentiment. In this case the amount spend on the project is lost.
Partnership risks
Hugo Games enter into various agreements with celebrities about developing and launching games. If the celebrities become unpopular in public, revenue can fall dramatically. To minimize the risk, we evaluate the persons before agreements are made.

For further information of risks, please also see prospectus dated 3 June 2015 "risks factors" page 23, 29–32.

HUGO GAMES ORGANIZATIONAL CHART

Hugo-Games Annual Report 2015

Management's review
Management's review

CORPORATE GOVERNANCE

GOOD CORPORATE GOVERNANCE IS ESSENTIAL FOR LONG TERM VALUE CREATION

The Board of Directors serves as a qualified dialogue partner for the daily management. The Board of Directors combines key industry insights, important business and financial skills as well as many years of management experience.

Hugo Games' Board of Directors and Management continually work with corporate governance principles to ensure that the management structure and control systems are appropriate and satisfactory. Hugo Games 2015 statutory report on corporate governance, cf. section 107b of the Danish Financial Statements Act, is available on Hugo games website at: http://www.hugogames.com/wp-content/uploads/2015/05/Hugo_Games_corporate_governance_2015.pdf

The Company complies with 37 of the 47 Danish recommendations on corporate governance (www.corporate-governance.dk). The Company complies partially with five recommendations and does not comply with:

2.2.1. The Committee recommends that the board of directors adopt policies on corporate social responsibility.

The Company aims for a sustainable development based on combining financial performance with socially responsible behaviour. The Company has not yet adopted official policies with respect to human rights, environmental impact or other aspects of corporate social responsibility, due to the current business size and activity level. However, it is the Company's aim to adopt such official policies on Corporate Social Responsibilities in line with the growth of the business activities, as the Company is aware of the importance of social responsibility. This is also currently reflected in the Company's individual employment contracts, underlining the importance of integrity and ethics – e.g. that the employees have an obligation to ensure that they follow the norms within the area of business they're operating in.

3.4.6. The Committee recommends that the board of directors establish a nomination committee chaired by the chairman of the board of directors.

Due to the structure and size of the Company's business, a nomination committee is not established. At least once a year the Board of Directors will conduct an assessment of the executive management and a self-assessment in order to evaluate the company's management competencies and performance in regards to its responsibilities. This is part of the tasks to be overseen by the chairman of the board.

3.4.7. The Committee recommends that the board of directors establish a remuneration committee.

Due to the structure and size of the Company and its business, a remuneration committee is not established, but it is part of the tasks to be overseen by the chairman of the board to ensure adequate remuneration. However, the Company has a positive interest in establishing a remuneration committee once the Company's business grows.

4.1. Form and content of the remuneration policy

It is the intention of the Company and the Board to adopt policies for the Company's remuneration of the Board and the Management, but for now the responsibility to propose such remuneration lies with the Chairman. The chairman of the Board of Directors shall regularly assess and propose principles for the remuneration of the Board and the Executive Management, including guidelines for incentive-based remuneration. The Company has adopted a set of guidelines for incentive remuneration of the executive board, which allows for the executive board to receive both a short term based cash bonus (maximum of 100 % of the annual salary) as well as a long term based warrant program (maximum of 100 % of the annual salary).

5.2.1. The Committee recommends that the board of directors decide whether to establish a whistleblower scheme for expedient and confidential notification of possible or suspected wrongdoing.

Due to the structure and size of the Company and its business, a whistleblower scheme has not been established. However, the Company intends to establish a whistleblower scheme once the Company's business growths.

Gender diversity

Currently no member of the Board of Directors is a woman. The Board of Directors has decided to set a target to have female representation on the Board of Directors at the latest by the Annual General Meeting 2018.

Internal Control systems

Hugo Games' risk management and internal control systems for financial reporting are designed to ensure that financial reporting meets current legislation and standards.

Hugo Games CEO is responsible for maintaining efficient internal controls. A management team consisting of 3 functional managers and specialists, who are responsible for the internal control of their respective area of responsibility, such as development, sales and finance, reports to the CEO.

Group's control measures comprise general as well as detailed controls to prevent, identify and correct errors and irregularities. Documentation of procedures is part of the internal control system and consists of flowcharts of procedures and descriptions of control measures.

These procedures/reports comprise i.a.:

A review of strategic and business objectives at least once a year.
A formalised annual budget with forecast and estimation procedures. Furthermore, management reporting is prepared, comprising:
Financial results and financial position, including analysis of cash flows and financial structure in the group.
Comparison of budgeted financial results, results from previous years and actual results.
Project management and cost control as well as current project reporting, project follow-up and review of accounting policies and estimates.

Also, the external auditors report to Management and the Audit Committee who assess the results of current examinations performed to determine to what extent Management and the Audit Committee can rely on the reports/processes which are primarily prepared and performed by the finance department.

Hugo-Games Annual Report 2015
Hugo-Games Annual Report 2015

Management's review

MANAGEMENT

BOARD OF DIRECTORS

Bartel David Weigand (cg83)

Chairman of the Board

Position:

CFO Day Birger BJ Mikkelsen

Educational background:

Bachelor of Economics from Copenhagen University

Competencies:

Strategy, Finance, Mergers & Associations and Business Development

Member of the board of:

Claire Group A/S
Aula Holding N. ApS

Shares in Hugo Games A/S:

0 shares

Board member since:

September 9, 2014

Casper Rose (cg21)

Vice Chairman of the Board

Position:

Professor, CBS

Educational background:

Land pr from Copenhagen University, Carol Iners in Finance and Accountancy, CBS Ph.D. from Department of Finance, CBS

Competencies:

Corporate Governance, Financial Analysts

Risk management

Chairman of the Board of:

CrowdBarber A/S
Heydrichs Apr.

Member of the board of:

GP-Purchasing A/S
GP-Storheberheim

Shares in Hugo Games A/S:

3,000 shares

Board member since:

February 6, 2015

CHARTERIAN SAND KIR (cg68)

Board member

Position:

Head of Private Banking, Sydbank

Educational background:

HGI-F from CBS, HGI-D From CBS, E-MBA from SME, CBS

Competencies:

Strategy, Business Development, Management

Shares in Hugo Games A/S:

164,114 shares

Board member since:

September 9, 2014

EXECUTIVE BOARD

Peter Ekman (cg55)

CFO

Employed since 2015

Educational background:

Master in business, management and finance

Chairman of the Board of:

CentralInternet Holding A/S

Member of the board of:

Ivanoff Interactive A/S

Shares in Hugo Games A/S:

10,069,638 shares

Roemus Lund (cg24)

Board member

Position:

Partner at Delacour Law Firm

Educational background:

Land Jsc from Copenhagen University, Attorney-at-law

Competencies:

Legal and commercial insight re: corporate law and commercial contracts, incl. IT and IP issues.

Member of the board of:

Persona A/S
Ivanoff Interactive A/S

Shares in Hugo Games A/S:

68,028 shares

Board member since:

February 6, 2015

Hugo Games Annual Report 2015

Management's review

HUGO GAMES IS NOW A LISTED COMPANY

SHAREHOLDER INFORMATION

An investment in Hugo Games is an investment in leisure and entertainment - a market in strong growth especially on digital platforms.

Hugo Games' Shares

Hugo Games shares was listed on Oslo Acess Stock Exchange at 26 June 2015 with an introduction price of NOK 11.0.

The official share price at 31 December 2015 was NOK 4.5 equal to a market capitalization of NOK 110m (DKK 87.3m). Total turnover of shares was 4.8m with a total value of NOK 31.8m.

Master Data:
Stock Exchange:	Oslo Acess
Sector:	Technology
ISIN Code	DK0060637999
Symbol:	HUGO
Share capital:	12,500,000 DKK
Denomination:	DKK E-S
No. of Shares:	25,000,000
Negotiable instruments:	Yes
Voting restrictions:	No

Share Capital

Hugo Games nominal share capital is DKK 12,500,000 divided into 25,000,000 shares of DKK 0.50. Hugo Games has only one share class. The board of Directors and the Management Board regularly assess whether the Group capital and share structures are consistent with the interests of the shareholders and the company. The company's share capital was increased with DKK 2,500,000 when the company was listed on 27 June 2015. 274,148 new shares was issued in January 2016. Following the capital increase Hugo Games have a nominal share capital of DKK 12,637,074 divided into 25,274,148 shares of DKK 0.50 each.

Shareholders structure

Hugo Games shareholders are primary residents from Denmark and Norway. At 31 December 2015 the largest shareholder holds 48.4% of the registered share capital. Below there is a list of shareholders holding more than 5% of the share capital or the votes.

Composition of shareholders at 4 April 2016
	Shares	Capital DKK	Capital %
Aula Holding*	12,089,658	6,044,829	48.4
MLL NewHold ApS**	1,509,202	754,601	6.0
MLL-001 ApS**	345,000	172,500	1.4
* Aula Holding ApS is controlled by CEO Henrik Kalle
** MLL NewHold ApS and MLL-001 Apa is controlled Merete Lindblad

At 31 December 2015, members of the Board of Directors and their related parties held 139,242 shares (nominal value DKK 129,621), corresponding to 1.0% of the share capital and a market value of 0.8m DKK. Members of management held 12,113,599 shares (nominal value DKK 6,056,800), corresponding to 48.5% of the share capital and a market value of DKK 42.3m.

Hugo Games Annual Report 2015

Annual general meeting

The Annual General Meeting will be held on 28 April 2016 At 10:00 am at BINGS, Vesterbrogade 149, 1620 København V.

At the next annual general meeting, the board of Directors proposes re-election of the current board members elected by the shareholders and of the Company's auditors, Grant Thornton.

Dividend an Allocation of profit

The Board of Directors recommends to the Annual General Meeting that no dividend will be declared in respect of the 2015 financial year. The Board of Directors recommends to the Annual General meeting that the consolidated loss for the year of DKK 29.4m be transferred to retained earnings.

Investor Queries

Any Questions and comments from shareholders, analysts and other stakeholders should be addressed to Søren Kokbøl Jensen via the Investor e-mail [email protected]

Selected stock announcements:

2015

17-06-2015 The Board of Oslo Børs approves Hugo Games A/S for listing on Oslo Acess
26-06-2015 Hugo Games A/S enters into market making agreement
26-06-2015 New security is quoted as from 26.06.2015
02-07-2015 Hugo Games announces strategic distribution agreement with Chinese publisher MyGames Ltd.
04-08-2015 Hugo Games announces new Studio Lead
11-08-2015 Change of strategic focus on the Hugo & Ronaldo app
21-08-2015 Hugo Games strengthens its operational focus and investor communication by announcing new Chief Operating Officer (COO)
28-08-2015 Q2 2015 report for Hugo Games
02-11-2015 Hugo Games announces new Digital Marketing Manager
16-11-2015 Hugo Games soft-launches Axe in Face in select territories
26-11-2015 Q3 2015 report Hugo Games
15-12-2015 Extraordinary General Meeting Hugo Games A/S
17-12-2015 Hugo Games soft-launches Hugo Troll Race 2 in select territories.

2016

06-01-2016 Financial Guidance
27-01-2016 Hugo Games A/S completes capital increase
26-02-2016 Hugo Games partners with American skateboard champion Nyjah Huston
26-02-2016 Hugo Games releases "Axe in Face 2" globally on iOS and Android
10-03-2016 Hugo Games releases "Hugo Troll Race 2" globally on iOS and Android
14-03-2016 Hugo Games soft-launches Hugo Flower Flush in select territories.

Financial Calendar 2016:

05-04-2016 Annual 2015 Financial Report
27-05-2016 Q1 2016 Financial Report
19-09-2016 Q2 2016 Financial Report
11-11-2016 Q3 2016 Financial Report

Hugo Games Annual Report 2015

Management's review

Statement by the Board of Directors and the Executive Board on the annual report

Information in accordance with the Danish financial statements act § 107 a

Adoption of changes of Articles of Association, dissolution of the Company, merger or demerger requires that the decision is adopted with at least 2/3 of the votes cast as well as the share capital represented at the general meeting.

Board of Directors consisting of 3-5 directors elected each year at the annual general meeting of the company for the period until the next annual general meeting. The directors are eligible for re-election. The Board of Directors shall appoint its own chairman and vice-chairman.

The Hugo Games' Board of Directors consists of four members headed by Chairman Bertel Maigaard. The Board of Directors is presented on page 22.

All members are up for re-election at the Annual General Meeting (AGM).
Remuneration proposal for ordinary Board members in 2016 will be DKK 0.12m and for the Chairman and Vice Chairman DKK 0,36m.

Until 6 February 2020, the Board of Directors is authorized to decide to obtain loans against issue of convertible notes with the right to subscribe for shares in the Company (convertible loans), and the Board of Directors is authorized to make the related capital increase.

Until 6 February 2020, the Board of Directors is authorized, with preferential right for the existing shareholders of the Company, to increase the Company's share capital one or more times by up to a total nominal amount of DKK 5,000,000 by cash payment. The capital increase can take place below market price.

Until 6 February 2020, the Board of Directors is authorized, without preferential right for the existing shareholders of the Company, to increase the Company's share capital one or more times by up to a total nominal amount of DKK 5,000,000 by cash as well as non-cash payment or by conversion of debt. The capital increase shall take place at market price.

The combined total share capital increase, performed pursuant to the above mentioned authorizations in provision 2.3, 2.4 and 2.5 in the articles of association, cannot exceed nominal DKK 5,000,000.

The group has not entered into contracts with change of control clauses.

The Board of Directors and the Executive Board have today considered and adopted the annual report of Hugo Games A/S for the financial year 1 January 2015 – 31 December 2015

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as approved by the EU. The financial statements of the parent company, Hugo Games A/S, have been prepared in accordance with the Danish Financial Statements A/S (Årsregnskabsloven). Furthermore, the annual report has been prepared in accordance with the additional Danish disclosure requirements for annual reports of listed companies.

In our opinion, the accounting policies applied are appropriate, thus ensuring that the consolidated financial statements and the financial statements provide a fair presentation of the group's and the parent company's assets, liabilities and financial position as at 31 December 2015 and of the results of the group's and the parent company's operations and the consolidated cash flows for the financial year 1 January 2015 - 31 December 2015.

We believe that the management commentary contains a true and fair review of the development and performance of the Group's and the parent company's business activities and financial situation, the earnings for the year and the financial position of the parent company and the financial position as a whole of the entities included in the consolidated financial statements, together with a description of the principal risks and uncertainties that the Group and the parent company face.

The annual report is submitted for adoption by the general meeting.

Copenhagen, 4 April 2016

Hugo-Games Annual Report 2015

Independent auditor's reports
Independent auditor's reports

To the Shareholders of Hugo Games A/S

Report on Consolidated financial statements and Financial statements of the Parent Company

We have audited the Consolidated financial statements and the Financial statements of Hugo Games A/S for the financial year 2015 comprising the Income Statement, Balance Sheet, Statement of Changes in Equity and Notes including accounting policies for the Group as well as for the Parent Company and Statement of Comprehensive Income and Cash Flow Statement for the Group.

The Consolidated financial statements are prepared in accordance with International Financial Reporting Standards as endorsed by the EU. The Financial statements of the Parent Company are prepared in accordance with the Danish Financial Statements Act. Moreover, both the Consolidated financial statements and the Financial statements of the Parent Company are prepared in accordance with additional Danish disclosure requirements for listed companies.

Management's Responsibility for the Consolidated financial statements and the Financial statements of the Parent Company

The Management is responsible for the preparation of the Consolidated financial statements and the Financial statements of the Parent Company that give a true and fair view in accordance with the above legislation and accounting standards, and for such internal control as Management determines is necessary to enable preparation of Consolidated financial statements and Financial statements of the Parent Company that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on the Consolidated financial statements and the Financial statements of the Parent Company based on our audit. We conducted our audit in accordance with International standards on Auditing and additional requirements under Danish Audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Consolidated financial statements and the Financial statements of the Parent Company are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Consolidated financial statements and the Financial statements of the Parent Company. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the Consolidated financial statements and the Financial statements of the Parent Company, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation of Consolidated financial statements and Financial statements of the Parent Company that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management, as well as evaluating the overall presentation of the Consolidated financial statements and the Financial statements of the Parent Company. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Our audit has not resulted in any qualification.

Opinion

In our opinion, the Consolidated financial statements give a true and fair view of the financial position at 31 December 2015 of the Group and of the results of the Group's operations and consolidated cash flows for the financial year 2015 in accordance with International Financial Reporting Standards as endorsed by the EU and additional Danish disclosure requirements for listed companies. Moreover, in our opinion the Financial statements of the Parent Company give a true and fair view of the financial position at 31 December 2015 and of the results of the Parent Company's operations for the financial year 2015 in accordance with the Danish Financial Statements Act and additional Danish disclosure requirements for listed companies.

Statement on Management's Review

We have read Management's Review, in accordance with the Danish Financial Statements Act.

On this basis, it is our opinion that the information provided in the Management's Review is consistent with the Consolidated financial statements and the Financial statements of the Parent Company.

Copenhagen, 4 April 2016

GRANT THORNTON
Statsautoriseret revisoropartrandskab
CVR-Nr 34 20 90 96
Ulrik Bloch-Sørensen
State-Authorised Public Accountant

Martin Bonholtz
State-Authorised Public Accountant

Hugo Games Annual Report 2015
Hugo Games Annual Report 2015

Consolidated balance sheet

Note	2015 DKK '000	2014 DKK '000
4 Revenue	3,198	6,344
Cost of sales	1,326	1,709
Gross profit	1,872	4,635
Other external expenses	14,811	5,474
Staff expenses	3,688	376
Loss before special items, depreciation, amortisation and impairment losses	-16,627	-1.215
5 Special items	5,878	0
Depreciation, amortisation and impairment losses	11,404	3,496
Operating loss (EBIT)	-33,909	-4,711
7 Financial income	12	0
8 Financial expenses	3,225	317
Loss before tax	-37,122	-5,028
9 Tax on loss for the year	-7,691	-1,399
Net loss for the year	-29,431	-3,629
Other comprehensive income	0	0
Comprehensive income	-29,431	-3,629
Distribution of comprehensive income
Parent company's shareholders	-29,431	-3,629
Non-controlling interests	0	0
Total	-29,431	-3,629
Earnings per share
10 Earnings per share (in DKK)	-1.302	-0.225
10 Diluted earnings per share (in DKK)	-1.302	-0.225

Huge Games Annual Report 2015

ASSETS	31/12/2015 DKK '000	31/12/2014 DKK '000
11 Completed development projects	25,563	13,565
11 Acquired rights	274	97
11 Goodwill	762	762
11 Development projects in progress	14,975	21,074
12 Other plant, fixtures and fittings, tools and equipment	64	21
9 Deferred tax asset	0	0
Other receivables	65	77
Total non-current assets	41,703	35,596
13 Trade receivables	234	554
Receivables from group companies	0	699
Income tax receivable	4,233	0
Other receivables	429	207
Prepayments	2,047	2,129
Cash	14,594	11,958
Total current assets	21,537	15,547
Total assets	63,240	51,143

Huge Games Annual Report 2015

Consolidated balance sheet

Consolidated statement of changes in equity

Amounts in DKK '000	Share total	Share premium	Retained earnings	Proposed dividend	Total equity
Equity as at 01/01/2014	80	0	13,505	0	13,585
Net loss for the year			-3,629		-3,629
Other comprehensive income			0		0
Comprehensive income			-3,629		-3,629
Cash capital increase	29	14,971			15,000
Costs of capital increase		-94			-94
Capital increase through transfer of reserves	9,891	-9,891			0
Group contribution through debt remission			12,022		12,022
Group contribution in connection with purchase of treasury shares			4,990		4,990
Purchase of treasury shares			-5,000		-5,000
Transactions with owners	9,920	4,986	12,012		26,928
Equity as at 31/12/2014	10,000	4,986	21,888	0	36,874
Equity as at 01/01/2015	10,000	4,986	21,888	0	36,874
Net loss for the year			-29,431		-29,431
Other comprehensive income			0		0
Comprehensive income			-29,431		-29,431
Cash capital increase	2,500	44,349			46,849
Costs of capital increase		-7,986			-7,986
Transfer of reserves		-41,349	41,349		0
Sale of treasury shares			5,750		5,750
Group contribution in connection with purchase of treasury shares			749		749
Purchase of treasury shares			-750		-750
Transactions with owners	2,500	-4,986	47,098		44,622
Equity as at 31/12/2015	10,500	0	39,555	0	52,055

Equity AND LIABILITIES

Note	31/12/2015 DKK '000	31/12/2014 DKK '000
Share capital	12,500	10,000
Share premium	0	4,986
Retained earnings	39,555	21,888
Total equity	52,055	36,874
Provisions for deferred tax	201	3,638
Payables to credit institutions	5,055	6,697
Total non-current liabilities	5,256	10,335
Payables to credit institutions	1,836	871
Payables to group companies	0	10
Prepayments received from customers	94	94
Trade payables	2,274	1,828
Income tax payable	68	23
Other payables	1,657	1,108
Total current liabilities	5,929	3,934
Total liabilities	11,185	14,269
Total equity and liabilities	63,240	51,143

Hugo Games Annual Report 2015

Hugo-Games Annual Report 2015

Consolidated cash flow statement

Consolidated notes

	2015 DKK '000	2014 DKK '000
Loss before tax	-37,122	-5,028
Adjustment of non-cash transactions:
Depreciation, amortisation and impairment losses	11,404	3,496
Financial income, reversed	-12	0
Financial expenses, reversed	3,225	317
Change in working capital:
Trade receivables	320	407
Trade payables	334	-514
Other receivables	-222	625
Prepayments	82	-1,409
Other payables	549	-1,319
Prepayments received from customers	0	94
Cash flows from operating activities before net financials	-21,442	-3,331
Financial income received	0	0
Financial expenses paid	-1,739	-57
Income tax received	874	0
Cash flows from operating activities	-22,307	-3,388
Purchase of property, plant and equipment	-64	-16
Purchase of intangible assets	-17,459	-12,778
Investments, net	12	-20
Cash flows from investing activities	-17,511	-12,814
Proceeds from cash capital increase	38,863	14,906
Disposal of treasury shares	5,749	0
Credit institutions, loans	-807	7,308
Group companies, loans	-119	5,856
Cash flows from financing activities	43,686	28,070
Total cash flows for the year	3,868	11,868
Cash, beginning of year	11,958	90
Net foreign exchange difference	-1,232	0
Cash, end of year	14,594	11,958

Accounting policies
Significant accounting estimates and assessments
Segment information
Revenue
Staff expenses
Special items
Financial income
Financial expenses
Tax
Earnings per share
Intangible assets
Property, plant and equipment
Trade receivables
Equity
Payables to credit institutions
Contingent liabilities
Security provided
Operating lease commitments
Financial risks and financial instruments
Related parties
Fee to parent company auditors appointed at the Annual General Meeting
Events occurring after the balance sheet date
Adoption of the annual report for publication
New accounting regulation

Hugo Games Annual Report 2015

Hugo-Games Annual Report 2015

Consolidated notes

1. Accounting policies

Hugo Games A/S is a limited liability company domiciled in Denmark. The consolidated financial statements for 2015 have been prepared in accordance with the International Financial Reporting Standards (IFRS) as approved by the EU and additional Danish disclosure requirements.

New standards and interpretations

The Group applied in 2015 for the first time standards and interpretations, which are effective for the financial year 2015. These standard and interpretations have no impact on the Group.

Consolidated financial statements

Business combinations

Newly acquired or newly founded companies are recognised in the consolidated financial statements as from the time of acquisition and the time of foundation, respectively. The time of acquisition is the time at which control of the company is actually obtained. Divested or discontinued companies are recognised in the consolidated statement of comprehensive income up until the time when control ceases.

When new companies are acquired and the group obtains control of an acquired company, it is recognised in accordance with the acquisition method, according to which the newly acquired company's identifiable assets, liabilities and contingent liabilities are measured at fair value at the date of acquisition.

1. Accounting policies – continued –

The acquisition price of a company is the fair value of the price paid for the acquired company. Expenses relating to the acquisition are recognised in the income statement when paid.

Foreign currency translation

Tax

Current tax payables and receivables are recognised in the balance sheet as tax computed on the basis of the taxable income for the year and taxes paid or refunded.

Current tax for the year is computed based on the tax rules and tax rates applicable at the balance sheet date.

Hugo-Games Annual Report 2015

Consolidated notes

1. Accounting policies – continued –

Deferred tax is recognised using the balance sheet liability method on the basis of all temporary differences between the carrying amounts and tax bases of assets and liabilities, except for deferred tax on temporary differences due to either initial recognition of goodwill or initial recognition of a transaction that is not a business combination, and where the temporary difference ascertained at the time of initial recognition does not affect either the tax results or the taxable income. The deferred tax is calculated based on the planned use of the individual asset or settlement of the individual liability.

The group is subject to joint taxation. The current Danish income tax is allocated between the jointly taxed companies in proportion to their taxable incomes.

Statement of comprehensive income

Revenue

1. Accounting policies – continued –

Income from the provision of advertising services is recognised as revenue as the agreed services are provided. For sales of advertising services provided via third parties (platform distribution partners), Hugo Games A/S is the primary contractual party for the users and fixes the prices. Income from advertising services is consequently measured exclusive of costs for such third parties.

Revenue is measured at the fair value of the fee received or receivable and is stated exclusive of VAT and discounts.

External expenses

Other external expenses comprise expenses relating to marketing, administrative expenses, costs of premises, bad debts, operating leases etc.

Staff expenses

Staff expenses comprise wages and salaries as well as social security expenses, pensions for group staff and other staff-related expenses.

Special items

Special items comprise material non-recurring expenses. These items are presented separately because they are treated as one-off occurrence.

Net financials

Net financials comprise interest income and expenses as well as realised and unrealised gains and losses on transactions in foreign currency.

Amortisation of capital losses and borrowing costs relating to financial liabilities is recognised on an ongoing basis as part of the interest expenses.

Balance sheet

Goodwill

Hugo-Games Annual Report 2015

Consolidated notes

1. Accounting policies – continued –

Development projects

Other development costs are recognised in the income statement under other external expenses or staff expenses as the costs are paid.

Property, plant and equipment

Property, plant and equipment are measured in the balance sheet at the lower of cost less accumulated depreciation and recoverable amount.

Non-current financial assets

Other receivables recognised under non-current assets comprise deposits and are measured at the lower of accumulated cost and recoverable amount.

Impairment of assets (impairment test)

1. Accounting policies – continued –

The recoverable amount of development projects in progress and goodwill are determined every year, regardless of whether any indications of impairment exists.

If an asset does not produce inflows independently of other assets, the recoverable amount is determined for the smallest cash-generating unit of which the asset forms part.

The higher of fair value less selling costs and value in use is used as the recoverable amount of the asset. The value is use is determined as the present value of the expected net cash flows from use of the asset. If the recoverable amount of the asset is lower than the carrying amount, the carrying amount is written down to the recoverable amount.

In so far as cash-generating units are concerned, the impairment loss is distributed in such a way that goodwill is written down for impairment first, and subsequently any remaining need for impairment is distributed on the other assets in the unit. However, individual assets cannot be written down to a value lower than their fair value less expected selling costs. Impairment losses are recognised in the income statement.

Receivables

Receivables comprise trade receivables and other receivables. Receivables are included in the category loans and receivables, which are financial assets with fixed or determinable payments that are not listed in an active market and are not derivative financial instruments. On initial recognition, receivables are measured at fair value and subsequently at amortised cost, which usually corresponds to the nominal value, less write-downs for bad debts.

Any write-downs for bad debts are determined on the basis of an individual assessment of the individual receivable.

Prepayments

Prepayments recognised under assets comprise costs incurred in respect of the subsequent financial year. Prepayments are measured at cost.

Dividend

Dividend is recognised as a liability at the time of adoption by the general meeting.

Hugo-Games Annual Report 2015

Consolidated notes

1. Accounting policies – continued –

Treasury shares

Acquisition costs and consideration for treasury shares and dividend from such are recognised directly in equity under retained earnings.

Liabilities

Non-current liabilities comprise other credit institutions. Payables to credit institutions are measured at cost at the time of contracting such payables (raising of loans). Subsequently, the liabilities are measured at amortised cost, meaning that the difference between the proceeds from the loan and the repayable amount is recognised in the income statement over the period of the loan as a financial expense according to the effective interest method.

Other financial liabilities comprise bank debt, trade payables, other payables to public authorities and other liabilities. On initial recognition, other financial liabilities are measured at fair value less any transaction costs. Subsequently, the liabilities are measured at amortised cost according to the effective interest method, so that the difference between the proceeds and the nominal value is recognised in the income statement as a financial expense over the period of the loan.

Cash flow statement

The cash flow statement shows cash flows from operating, investing and financing activities as well as cash at the beginning and end of the year.

Cash and cash equivalents comprise cash less overdraft facilities that are an integrated part of the cash management.

2. Significant accounting estimates and judgements

Accounting judgements reflect decisions made by the management as to how the accounting policies are applied in specific situations where the accounting treatment depends on qualitative assessments. Examples could be when the risk passes or how a certain transaction or item is best presented to provide reliable and relevant information.

The following accounting estimates and judgements have had significant impact on the consolidated financial statements for 2015:

Capital resources

Hugo Games has a large number of games under development. Until successful launch of new games and sufficient positive cash flow from operations is obtained, the Group is dependent on existing capital resources.

According to the most recent budgets approved by management, the existing capital resources are sufficient to complete the full operation for 2016.

In case that the development of new games does not progress as planned or the launches are unsuccessful, Hugo Games can decrease development costs and other costs accordingly and secure sufficient liquidity to maintain operations for 2016.

The Board of directors is authorized to increase the Company's share capital one or more times up to a total nominal amount of DKK 5,000,000 by cash as well as non-cash payments or by conversion of debt. Use of these authorizations could further strengthen the capital resources of the Group.

Hugo-Games Annual Report 2015

Consolidated notes

3. Segment information

The group consists of one operating segment.

Geographic distribution

All intangible assets and property, plant and equipment are located in Denmark. The group primarily sells its products through third parties (platform distribution partners). The most important single countries are Denmark and Germany. For 2015, revenue totalled DKK 418k in Denmark (2014; DKK 1,378k), and DKK 593k in Germany (2014; DKK 846k). Revenue from one customer amounted to DKK 542k and from another customer to DKK 400k in 2015 (no individual customer accounted for more than 10% of the Group's revenue in 2014).

	2015	2014
	DKK'000	DKK'000
4. Revenue
Revenue is distributed as follows:
Sales of games and in-app purchases	1,671	5,213
Sales of services (advertising services)	1,340	874
Licence income	187	257
Total	3,198	6,344

2. Significant accounting estimates and assessments – continued –

Amortisation of development projects

Impairment test

Key assumptions for the determination of the recoverable amount of the cash-generating units are the expected number of daily users (Daily Active Users or DAU) and the degree of retention of such users in the individual game plus the revenue per daily active user (Average Revenue Per Daily Active User or ARPDAU). Key assumptions about DAU are stated in note 11.

Special items

The management has made an allocation of the transaction costs relating to the IPO. Incremental costs related to the listing of the new shares (capital increase) are recognised in equity. Transaction costs relating to the existing shares are recognised in the statement of profit and loss as described in note 6.

Hugo-Games Annual Report 2015

Consolidated notes

	2015 DKK '000	2014 DKK '000
5. Staff expenses
Wages and salaries	6,677	5,299
Pensions	455	370
Other social security expenses	177	201
Total	7,309	5,870
Total staff expenses are recognised as follows:
Staff expenses, income statement	3,688	376
Development projects, capitalized	3,621	5,494
Total	7,309	5,870
Average number of employees in the year	11	11
Number of employees, end of year	15	9
Remuneration for key management employees:
Parent company's Board of Directors, fee	480	0
Parent company's Executive Board, short-term employee benefits	1,812	942
Parent company's Executive Board, pension	58	0
Parent company's Board of Directors, IPO related assistance *)	1,331	0
Parent company's Executive Board, IPO related assistance *)	2,785	0
Total remuneration for key management employees	6,466	942

*) IPO related assistance are recognised directly in equity as "Costs of capital increase".

6. Special items

The net loss in 2015 was significantly impacted by costs related to the IPO process and the listing on Oslo Stock Exchange/Aveos, which took take place 26 June 2015.

The total costs related to the IPO process incurred relate jointly to stock exchange listing of existing shares and the offering of new shares. Hence, the costs are allocated to those transactions based on the number of new shares in proportion to the total number of shares in accordance with the provisions in IAS 32.38. Costs related to exchange listing of existing shares, DKK 5,878 thousand, are recognized as special items in the income statement.

Hugo-Games Annual Report 2015

208

Consolidated notes

	2015	2014
	DKK '000	DKK '000
7. Financial income
Interest income on assets measured at amortised cost	12	0
Foreign exchange gains, net	0	0
Total	12	0
8. Financial expenses
Interest expenses on liabilities measured at amortised cost	585	317
Exchange rate loss, net	2,640	0
Total	3,225	317
	2015	2014
---	---	---
	DKK '000	DKK '000
9. Tax
Tax on loss for the year:
Current tax	59	23
Change in deferred tax	-3,517	1,852
Tax receivable, tax credit scheme/joint taxation contributions	-4,233	-3,274
Tax on loss for the year	-7,691	-1,399
Reconciliation of effective tax rate:
Tax computed on the loss before tax at a tax rate of 23.5% / 24.5%	-8,724	-1,232
Effect of changed tax rate in Denmark	-156	-126
Tax value of non-deductible expenses	1,073	15
Other adjustments	126	-66
Effective tax rate (20.7% / 27.8%)	-7,691	-1,399

Huge-Games Annual Report 2015

Consolidated notes

	2015	2014
	DKK '000	DKK '000
9. Tax - continued -
Deferred tax is made up as follows:
Intangible assets	7,437	7,842
Property, plant and equipment	-52	-74
Tax losses carried forward	-7,184	-4,230
Total deferred tax	201	3,638
which is distributed as follows:
Deferred tax assets	0	0
Deferred tax liabilities	201	3,638
Total	201	3,638
	2015	2014
---	---	---
10. Earnings per share
Net loss for the year (in DKK '000)	-29,431	-3,629
Average number of shares	22,666,667	16,327,309
Average number of treasury shares	-70,833	-188,890
Average number of shares in circulation	22,595,834	16,238,429
Diluted average number of shares in circulation	22,595,834	16,238,429
Earnings per share (in DKK)	-1.302	-0.225
Diluted earnings per share (in DKK)	-1.302	-0.225

Average number of shares in 2014 is adjusted to reflect changes in the number of shares from share split in June 2015.

Huge-Games Annual Report 2015

Consolidated notes

Intangible assets

Amounts in DKK '000	Completed development projects	Acquired rights	Goodwill	Development projects in progress	Total
Financial year 2015
Cost as at 01/01/2015	18,818	100	762	21,074	40,754
Additions during the year	4,107	100	0	15,152	17,459
Transferred during the year	19,252	0	0	-19,252	0
Disposals during the year	0	0	0	0	0
Cost as at 31/12/2015	42,176	300	762	14,975	58,213
Amortisation and impairment
losses as at 01/01/2015	5,253	3	0	0	5,256
Impairment losses during the year	3,542	0	0	0	3,542
Amortisation during the year	7,819	23	0	0	7,842
Amortisation and impairment
losses as at 31/12/2015	16,613	26	0	0	16,639
Carrying amount as at
31/12/2015	25,563	274	762	14,975	41,574
Financial year 2014
Cost as at 01/01/2014	14,143	0	762	13,071	27,976
Additions during the year	4,675	100	0	8,003	12,778
Disposals during the year	0	0	0	0	0
Cost as at 31/12/2014	18,818	100	762	21,074	40,754
Amortisation and impairment
losses as at 01/01/2014	1,786	0	0	0	1,786
Impairment losses during the year	0	0	0	0	0
Amortisation during the year	3,467	3	0	0	3,470
Amortisation and impairment
losses as at 31/12/2014	5,253	3	0	0	5,256
Carrying amount as at
31/12/2014	13,565	97	762	21,074	35,498

Intangible assets - continued -

Impairment test

Cash-generating units comprising goodwill and development projects in progress are tested for impairment at least once a year and more frequently in case of indications of impairment.

The recoverable amount is determined at a calculated value in use based on budgets and prognoses for the coming 3 financial years approved by the Board of Directors.

The group's budgets and prognoses for the coming 3 years and thus the determination of the recoverable amount of the cash-generating units are substantially impacted by the management's expectations for growth in connection with the launch of new games.

Impairment losses during the year

The impairment test at year end 2015 led to an impairment loss of tDKK 3,541 which was recognised in the income statement. The impairment loss is due to disappointing performance and relate to completed development projects in the cash-generating unit "Rocket fuel".

Distribution of intangible assets on cash-generating units are as follows with no remaining amortisation periods exceeding 36 months (distribution changed compared to 2014 as a result of reorganisation of the development activities):

Amounts in DKK '000	Completed development projects	Acquired rights	Goodwill	Development projects in progress	Total
Cash Generating Units 31/12/2015
Endless runner games	7,086			7,702	14,788
Match3 games	18,134			4,837	21,971
Tower defence games				2,436	2,436
Rocket fuel					0
Hugo Games group			762		762
Other units	343	274			617
Total	25,563	274	762	14,975	41,574
Cash Generating Units 31/12/2014
Super casual games	2,492			5,259	7,751
Casual/sims games	6,217			1,841	8,058
Strategy games	4,524				4,524
Hugo Games group			762	13,974	14,736
Other units	332	97			429
Total	13,565	97	762	21,074	35,498

Hugo-Games Annual Report 2015

Consolidated notes

Intangible assets - continued -

Key assumptions for the determination of the recoverable amount of the cash-generating units are the expected number of daily users (Daily Active Users or DAU) of the games and the average revenue per daily active user (Average Revenue Per Daily Active User or ARPDAU). The disclosure of the key assumption DAU are changed from 2014 to 2015 to better reflect the expected development. For 2014 DAU are stated 120 days after launch of the individual games and from 2015 are stated the expected number of DAU in the budget period (36 months). Budgets for impairment test purposes are based solely on existing resources and planned game development and do not include additional cash flow from new games in the budget period. Hence, key assumptions about DAU used in budgets for impairment test purposes are significantly lower than the Groups long term goals that include cash flow from future game development.

As a consequence of the expectation that most of the revenue from new games is realised within 3 years of their launch, neither the discount rate nor growth during the terminal period represent significant assumptions in respect of the recoverable amount. The uncertainty associated with the determination of the recoverable amount is primarily related to DAU, as ARPDAU is based on historical experience. The average ARPDAU per game is DKK 0.05 - 0.24 for all cash generating units for all periods. Budgets approved by the management express the following expectations for the cash-generating units:

DAU after year end (in thousands)	6 months	12 months	24 months	36 months
Cash Generating Units 31/12/2015
Endless runner	425	627	988	1,473
Match5	109	218	264	325
Tower defence	44	61	99	247
Hugo Games group	594	922	1,368	1,961
DAU after 120 days (in thousands)	31/12/2014
---	---
Cash Generating Units
Super casual games (120 days after launch)	1,480
Casual/sims games (120 days after launch)	770
Strategy games (120 days after launch)	290
Hugo Games group (120 days after launch)	2,520

The management has assessed that reasonably probable changes in the key assumptions will not lead to further impairment.

Hugo-Games Annual Report 2015

Consolidated notes

Trade receivables

	31/12/2015 DKK '000	31/12/2014 DKK '000
Gross receivable	234	554
Provision for losses	0	0
Total	234	554

Due receivables not written down:

Overdue, less than 30 days	0	0
Overdue, more than 30 days	0	0
Total	0	0

The fair value does not differ significantly from the carrying amount.

Equity

Share capital

The company's share capital consists of 25,000,000 shares of DKK 0.50 each. The shares are fully paid in. The shares are not divided into classes, and no shares enjoy special rights.

Treasury shares

The group own no treasury shares at the end of the reporting period in 2015 (2014: nominally DKK 850k, corresponds to 8.5% of the parent company's share capital).

Capital management

The group aims to ensure structural and financial flexibility as well as competitive strength. For that purpose, the group regularly assesses what the appropriate capital structure for the group is. Reference is made to the paragraph "Capital resources" in note 2 Significant accounting estimates and judgements.

Dividend

It is proposed that no dividend will be paid.

Payables to credit institutions

Amounts in DKK '000	Currency	Term to maturity	Interest	Carrying amount	Fair value
31/12/2015
The Danish Growth Fund, Vækst-fonden, floating-rate loan	DKK	3.5 years	CIBOR + 6.6%	6,891	8,622
Total as at 31/12/2015				6,891	8,622
31/12/2014
The Danish Growth Fund, Vækst-fonden, floating-rate loan	DKK	4.5 years	CIBOR + 6.6%	7,568	11,995
Total as at 31/12/2014				7,568	11,995

In addition to interest, the Danish Growth Fund is entitled to a performance bonus, if the company realises a positive EBITDA. No performance bonus is recognised for 2015 or 2014.

Methods and assumptions for the determination of fair value

Floating-rate payables to credit institutions are measured at nominal value plus estimated performance bonus (level 3).

Contingent liabilities

The group companies was taxed jointly with the other companies in the Aula Holding ApS group until 25 June 2015, and, as from the 2013 financial year, they have joint and several and unlimited liability together with the other jointly taxed companies for the total income tax and any obligations to withhold tax at source on interest, royalties and dividends for the jointly taxed companies.

The liability also includes any subsequent corrections to the calculated tax liability as a consequence of changes made to the jointly taxable income etc. Management consider the risk of significant adjustments related to income tax to be low.

Performance bonus to credit institutions (ref. note 15) is limited to DKK 5,734k.

Hugo-Games Annual Report 2015

Consolidated notes

17. Security provided

As security for payables to credit institutions of DKK 6,891k (2014: DKK 7,568k), the subsidiary has provided a company charge of DKK 7,500k (2014: DKK 7,500k) comprising goodwill, intellectual property rights, trade receivables, inventories, other plant, fixtures and fittings, tools and equipment. The total carrying amount of the comprised assets is DKK 41,872k (2014: DKK 38,046k).

18. Operating lease commitments

	31/12/2015 DKK '000	31/12/2014 DKK '000
The group has concluded operating leases in respect of office premises. The leases are based on fixed lease payments, which are index-adjusted once every year. The leases are non-terminable.
The total, future minimum lease payments are distributed as follows:
Within 1 year	98	298
1-5 year(s)	0	0
After 5 years	0	0
Total	98	298
Operating lease payments recognised in the income statement amount to	394	519

19. Financial risks and financial instruments

Risk management policy

Interest rate risk

Amounts in DKK '000	2015		2014
	Income statement	Equity	Income statement	Equity
The Danish Growth Fund, Vækstfonden, floating-rate loan	-54	-54	-62	-62
Total	-54	-54	-62	-62

A reasonably probable lower interest rate level compared with the interest rate level at the balance sheet date would have a similar, opposite effect on the loss for the year and equity.

Assumptions for sensitivity analysis:

Sensitivities are based on the recognised financial liabilities as at 31 December
The sensitivity is based on a change of 1%
The above changes are regarded as reasonably probable based on the current market situation and expectations for the market development in the interest rate level.

Credit risk

The maximum credit risk relating to receivables corresponds to the carrying amount. Information about trade receivables due appears from note 13. The group is not subject to material credit risks.

Hugo-Games Annual Report 2015

Consolidated notes

19. Financial risks and financial instruments - continued -

Currency risk

The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's monetary assets and liabilities denominated in foreign currencies.

The following tables demonstrate the sensitivity to a reasonably possible change in NOK and GBP exchange rates, with all other variables held constant. The Group's exposure to foreign currency changes for all other currencies is not material.

Amounts in DKK '000	Effect on loss before tax	Effect on pre-tax equity
Year end 31/12/2015
Change in NOK rate	+5%	644
Change in NOK rate	-5%	-644
Change in GBP rate	+5%	-34
Change in GBP rate	-5%	34
Amounts in DKK '000	Effect on loss before tax	Effect on pre-tax equity
---	---	---
Year end 31/12/2014
Change in NOK rate	+5%	0
Change in NOK rate	-5%	0
Change in GBP rate	+5%	-28
Change in GBP rate	-5%	28

The Group has not used derivatives to reduce currency risks in 2015 or 2014. Foreign currency risks are managed by the Executive Board's day-to-day monitoring of the group.

19. Financial risks and financial instruments - continued -

Liquidity risk

The group's liquidity risk covers the risk that the group is not able to meet its liabilities as they fall due. The maturities of financial liabilities appear from the tables below. All amounts are contractual cash flows, i.e. inclusive of interest. Reference is made to the paragraph "Capital resources" in note 2 Significant accounting estimates and judgements.

Amounts in DKK '000	Within 1 year	1-2 year(s)	2-5 years	Over 5 years	Total
As at 31/12/2015
Other credit institutions	2,375	2,949	4,836	0	10,160
Trade payables	2,274	0	0	0	2,274
Other payables	1,657	0	0	0	1,657
Total	6,306	2,949	4,836	0	14,091
As at 31/12/2014
---	---	---	---	---	---
Other credit institutions	1,453	5,585	8,442	0	15,480
Trade payables	1,828	0	0	0	1,828
Other payables	1,108	0	0	0	1,108
Total	4,389	5,585	8,442	0	18,426

20. Related parties

Ownership

Aula Holding ApS, Vitus Berings Allé 16, DK-2930 Klampenborg, held the majority of the voting rights of Hugo Games A/S until 28 June 2015. CEO Henrik Kalle is the ultimate controlling party of Aula Holding ApS. At 18 June 2015, the date of the IPO, the voting rights of Aula Holding ApS were reduced to below 50%, hence control ceased.

Transactions with Aula Holding ApS (parent)

The Group acquired 1,275% of the shares in Hugo Games A/S (treasury shares) from Aula Holding ApS in January 2015 at a price of DKK 750 thousand. At the same time a contribution of DKK 748.5 thousand was received from the parent.

Hugo Games Annual Report 2015

Hugo-Games Annual Report 2015

Consolidated notes

Related parties – continued –
Equity investments in other companies

Name	Registered office	Ownership interest
Subsidiaries
Hugo Games Development ApS	Frederiksberg	100%
Ivanoff Interactive A/S	Frederiksberg	100%
Transactions with key management employees
Remuneration for the management is disclosed in note 5. The Group has not entered into contracts with change of control clauses.
Transactions with other related parties
There were no transactions with other related parties.
21. Fee to parent company auditors appointed at the Annual General Meeting
	2015	2014
	DKK '000	DKK '000
Grant Thornton
Statutory audit	155	0
Other assurance engagements	0	0
Tax consultancy	0	0
Other services	16	0
Info:Revision
Statutory audit	0	100
Other assurance engagements	75	0
Tax consultancy	15	15
Other services	517	190
Total	778	305

Events occurring after the balance sheet date
Apart from the above, no important events have occurred after the end of the financial year.
Adoption of the annual report for publication
At the board meeting on 4 April 2016, the Board of Directors adopted this annual report for publication. The shareholders of Hugo Games A/S have the power to amend the Annual Report. The annual report will be presented to the shareholders for approval at the annual general meeting on 28 April 2016.
New accounting regulation
IASB has published a number of new and changed accounting standards and interpretations, which are not mandatory for the preparation of the consolidated financial statements for 2015. The management has launched an assessment of the impact of IFRS 9 on financial instruments (effective date 1 January 2018, not yet approved by the EU), IFRS 15 on revenue recognition (effective date 1 January 2018, not yet approved by the EU) and IFRS 16 on leases (effective date 1 January 2019, not yet approved by the EU) on the future financial reporting. The other standards are not expected to have any substantial impact on the group.

Hugo-Games Annual Report 2015

Parent company accounting policies

Parent company income statement

The financial statements of the parent company Hugo Games A/S have been prepared in accordance with the provisions of the Danish Financial Statements Act on listed companies.

The financial statements are presented in Danish kroner (DKK).

The parent company's accounting policies have been applied consistently with last year.

Differences in relation to the group's accounting policies

Income statement and balance sheet

Equity investments in subsidiaries

Profits or losses in subsidiaries are recognised in the income statement in proportion to the shares equivalent to the equity investments. Newly acquired or newly founded enterprises are recognised in the financial statements as from the time of acquisition. Companies divested or discontinued are recognised until the date of divestment.

Cash flow statement

No cash flow statement is prepared for the parent company, as the parent company is included in the consolidated cash flow statement, see Section 86(a) of the Danish Financial Statements Act.

Now	2015 DKK '000	2014 DKK '000
Other external expenses	9,059	13
Staff expenses	0	0
Loss before depreciation, amortisation and impairment losses	-9,059	-13
Depreciation, amortisation and impairment of property, plant and equipment and intangible assets	0	0
Operating loss	-9,059	-13
Share of loss from equity investments in group companies	-20,262	-3,808
Other financial income	1,008	0
Other financial expenses	-2,665	0
Total net financials	-21,919	-3,808
Loss before tax	-30,978	-3,821
Tax on loss for the year	-1,356	-3
Net loss for the year	-29,622	-3,818
Proposed distribution of net loss
Dividend for the financial year	0
Retained earnings	-29,622
Total	-29,622

Hugo Games Annual Report 2015

Parent company balance sheet

	2015 DKK'000	2014 DKK'000
1. Tax
Current tax for the year	0	0
Change in deferred tax	-1,356	-3
Total tax for the year	-1,356	-3
Tax comprises:
Tax on loss for the year	-1,356	-3
Tax on changes in equity	0	0
Total	-1,356	-3
2. Financial items
Financial income include interest from group enterprises	996	0
Financial expenses include interest to group enterprises	24	0
3. Investments in group companies
	31/12/2015 DKK'000
Cost as at 01/01/2015	24,402
Additions during the year	0
Disposals during the year	0
Cost as at 31/12/2015	24,402
Value adjustments as at 01/01/2015	-2,773
Share of loss before amortisation of goodwill during the year	-19,830
Amortisation of goodwill during the year	-190
Elimination of intercompany profit after tax	-242
Value adjustments as at 31/12/2015	-23,035
Carrying amount as at 31/12/2015	1,367

Huge Games Annual Report 2015

ASSETS
Note	31/12/2015	51/12/2014
	DKK'000	DKK'000
Equity investments in group companies	1,367	21,629
Total investments	1,367	21,629
Total non-current assets	1,367	21,629
Receivables from group companies	36,665	14,877
Deferred tax asset	1,366	9
Other receivables	54	0
Total receivables	38,085	14,886
Cash	12,965	1
Total current assets	51,050	14,887
Total assets	52,427	36,516

EQUITY AND LIABILITIES

Share capital	12,500	10,000
Share premium	0	4,986
Retained earnings	38,984	21,508
Total equity	52,484	36,494
Trade payables	647	12
Income tax payables	9	0
Payables to group companies	277	10
Total current liabilities	933	22
Total liabilities	933	22
Total equity and liabilities	52,427	36,516

Contingent liabilities
Security provided

Huge Games Annual Report 2015

Parent company notes

Equity

Amounts in DKK '000	Share total	Share premium	Retained earnings	Total
Balance as at 01/02/2014	80	0	13,315	23,395
Purchase/sale of treasury shares
Group contribution			12,021	12,021
Cash capital increase	29	14,877		14,906
Capital increase through transfer of reserves	9,891	-9,891		0
Group contribution in connection with purchase of treasury shares			4,990	4,990
Purchase of treasury shares			-5,000	-5,000
Proposed distribution of net loss			-3,818	-3,818
Balance as at 31/12/2014	10,000	4,986	21,508	36,494
Balance as at 01/02/2015	10,000	4,986	21,508	36,494
Purchase/sale of treasury shares
Cash capital increase	2,500	44,349		46,849
Costs of capital increase		-7,986		-7,986
Transfer of reserves		-12,349	42,349	0
Sale of treasury shares			5,750	5,750
Group contribution in connection with purchase of treasury shares			749	749
Purchase of treasury shares			-750	-750
Proposed distribution of net loss			-29,622	-29,622
Balance as at 31/12/2015	12,500	0	38,984	51,484

Share capital movements during the 4 preceding financial years:

	DKK '000
Foundation of company, 2011	80
Cash capital increase, 2014	29
Capital increase through transfer of reserves, 2014	9,891
Capital increase, 2015	2,500
Balance as at 31/12/2015.	12,500

The share capital consists of 25,000,000 shares of nominally DKK 0.50 each. Reference is also made to note 14 in the consolidated financial statements.

Hugo Games Annual Report 2015

Hugo-Games Annual Report 2015

Appendix 3 - Interim Accounts Q1 2016 (IFRS)

Page 1

Hugo Games A/S - Interim report, Q1 2016

Page 2

Hugo Games A/S

INTERIM REPORT Q1 2016

Three months ended 31 March 2016

Revenue in line with expectations, two games released globally

Q1 2016 has been an exciting quarter launching Axe in Face 2 and Hugo Troll Race 2 globally, Hugo Flower Flush went into soft launch and on top of that we went into partnership with no less than Nyjah Huston – the American super skater. In April and May we have managed to sign up with Cam Newton – the American football player, Ronaldo: Kick 'n'Run went into soft launch and just a few days ago we signed an agreement with Lima Sky, creator of the highly successful Doodle Jump. With this in mind, we are following our ambitious plan with nine games to be launched in 2016 and more to come in 2017. The financial results for Q1 2016 differ from our expectations, but our first priority will always be to deliver the best games possible – even if it burdens the financial results in the short term. We are confident that it will pay off in the long run". Henrik Kølle, CEO

Operational highlights of the quarter

Axe in Face 2 and Hugo Troll Race 2 were launched globally in February and March 2016 respectively and Hugo Flower Flush went into soft launch in March (se Pipeline update page 3).
Nyjah Huston – the twenty-one-year-old LA-based skateboard legend – was signed in February 2016 and marks another milestone for Hugo Games entering partnerships with celebrities.

Financial highlights of the quarter

Revenue amounted to DKK 792t in Q1 2016 compared to DKK 909t in Q1 2015 - down 13%. Gross profit of DKK 674t was in line with the expected level of DKK 505-618t. (Gross profit is equivalent to net revenue in our guidance – going forward we will only use gross profit).
EBITDA before special items was a loss of DKK 3.3m in Q1 2016 compared to a loss of DKK 0.8m in Q1 2015. The original forecast of DKK 2.9m was exceeded because of completion delays and higher marketing expenses for the newly launched games.
The Group's equity at 31 March 2016 was DKK 48.3m. The equity increase compared to Q1 2015 is due to the flotation of the company. The equity ratio was 81% at 31 March 2016.

Financial guidance for 2016

Hugo Games retains its guidance for the full year. Gross profit in the range of DKK 20-25m and EBITDA before special items in the range of DKK 3-7m.

Events occurring after the balance sheet date

The company has entered into a worldwide exclusive agreement with American football quarterback and icon Cam Newton cf. company announcement no. 12 of 25 April 2016.

Any queries regarding this company announcement may be addressed to

Henrik Kølle, CEO +45 4028 5054 or [email protected]
Søren Kokbøl Jensen, IR manager +45 29 44 50 01 or [email protected]

Hugo Games A/S - Interim report, Q1 2016

CEO-letter: Strong product portfolio, new partnerships

The mobile game market is booming, and we do our very best to keep up to speed in Hugo Games. In the first quarter of 2016 we launched two new games globally, Axe in Face 2 and Hugo Troll Race 2. Hugo Flower Flush went into soft launch and on top of that, we went into partnership with no less than Nyjah Huston – the American super skater.

Developing games is a very dynamic process. It is essential to ensure the best possible starting point and a very close follow-up on user data – equivalent to soft launch. Both Axe in Face 2 and Hugo Troll Race2 were some months delayed compared to the original timeline burdening the financial results in the short term – low revenue but high marketing expenses. However, we are confident that it will pay off in the long run.

Strong product portfolio of mobile games fronted by big sports stars

Since we changed our agreement with Ronaldo and received acceptance to make a game solely with Ronaldo and in a more football flavored surrounding, we have been looking for more deals in the category of sports celebrities games. Therefore, we were particularly pleased to announce the signing of the world's no. 1 skateboarder; Nyjah Huston. We are already preparing the game design and expect to launch a super cool game that will address the growing market of skateboarders and fans of skateboarders.

With the signing of Nyjah Huston, we see ourselves being first movers within the mobile gaming industry, having a strong product portfolio of mobile games fronted by big sports stars. Many doors are now open with the possibility of expanding our portfolio even further, the latest name being the big American football player – Cam Newton, whom we signed in April.

Looking forward

With the initiatives made in Q1 and after, not least signing Nyjah Huston and Cam Newton, we feel that we are poised for a strong 2016 with a product portfolio stronger than ever. Ronaldo: Kick'n'Run and Hugo Flower Flush will be launched globally in Q2 and additional five games are expected to be launched in 2016.

Our new partnership with Lima Sky developing a new mobile game, announced 24 May 2016 is another example of strategic alliances emphasizing our expertise in mobile gaming. We are looking very much forward to creating a new game originating from the Doodle Jump mobile game in an equally joint venture business model. Doodle Jump is one of the most iconic mobile gaming brands on the App store with over 300 millions downloads during the last 5 years placing Doodle Jump in top 5 on the overall chart for paid app games. Lime Sky's and Hugo Games new joint mobile game is planned for release in Q1-Q2 2017.

In order to execute on our strategy and product lineup, it's essential that we increase our cash position as announced in January and April on our general meetings. The Board of directors has decided to carry out a capital increase in July 2016, and we very much hope that existing and new shareholders will continue to accompany us on this exciting growth journey in the coming years.

Hugo Games A/S - Interim report, Q1 2016

Page 3
Hugo Games A/S - Interim report, Q1 2016
Page 4

Pipeline update

Hugo Games have a total of nine new games set for release in 2016 on Apple App Store and Google Play (Provision stores), all from which we expect to succeed in reaching the expected KPIs in terms of Daily Active Users (DAU) and Average Revenue Per Daily Active User (ARPDAU). For the first quarter of 2016, the average DAU was 71,420 and ARPDAU amounted to USD 0,016.

Game	Release Date	Type	Status
Axe in Face 2	Q1	Acquired IP	Released February 2016 – ann. no 7/2016
Hugo Troll Race 2	Q1	Hugo the Troll IP	Released March 2016 – ann. no 8/2016
Hugo Flower Flush	Q2	Hugo the Troll IP	Soft Launch March 2016 – ann. no 9/2016
Ronaldo: Kick’n’Run	Q2	Celebrity IP	Soft Launch April 2016 – ann. no 13/2016
Street Soccer Ultimate	Q3	Sports game	Will be launched in Q3 instead of Q2 in connection with the Olympics, August 2016 in Rio de Janeiro, Brazil
Najah Huston: Super Skater	Q4	Celebrity IP
Hugo Nordic	Q4	Hugo the Troll IP
Fashion Fabulous	Q4	Hugo or Celebrity
Cam Newton: Football Run	Q4	Celebrity IP

Released:

Axe in Face 2 has not yet performed as assessed, however we still see a potential for Axe in Face 2 and is currently negotiating possible partnerships that will bring Axe in Face 2 on track.
Troll Race 2 had a release in line with expectations in terms of daily active users, actually we have seen a higher number of daily active users than expected but the monetization per user was lower than expected.

Soft Launch:

Hugo Flower Flush currently show some very promising analytics data from its soft launch.
Ronaldo: Kick’n’Run went into soft launch mid-April, accordingly it is too early to say anything about player behavior and analytic reading. However, the soft launch game has already received excellent user reviews.

We expect that both Hugo Flower Flush and Ronaldo: Kick’n’Run will go into global release in Q2 2016 as previously announced.

New Game:

In continuation of the partnership with Cam Newton it has also been decided to launch a new game called Cam Newton: Football Run.

Pipeline adjustment:

Street Soccer Ultimate will be launched in Q3 instead of Q2 in connection with the Olympics, August 2016 in Rio de Janeiro, Brazil.

Key figures and financial performance

– Revenue in line with expectations, EBITDA burden by higher marketing costs

Revenue amounted to DKKt 792 in Q1 2016 compared to DKKt 909 in Q1 2015, down 13%. Gross profit DKKt 675 was in line with the expected level of DKKt 505-618.

The full potential of the newly launched games has not yet fully materialised but sign up rates from Axe in Face 2 and Hugo Troll Race 2 are expected to increase in the coming months, and the same revenue pattern will go for the upcoming game launches.

The revenue split in Q1 2016 on advertisements and in-app purchases has been 50/50 and in relation to the geographical split, the German, American, Russian, Turkish and Danish market have been dominating, but we have also seen very positive trends in the Asian market.

DKK '008	Q1 2016	Q1 2015	2015
Revenue	792	909	3.198
Gross profit	674	757	2,697
Loss before special items (EBITDA)	-3,346	-807	-16,627
Operating profit/loss (EBIT)	-6,014	-3,958	-33,909
Net financials	10	-134	-3,213
Net loss for the year	-4,716	-3,492	-29,431
Total assets	59.841	55,688	63,240
Investments in property, plant and equipment	0	0	64
Capitalized development costs	4.959	4.659	17,259
Equity	48.289	39,131	52,055

Costs increased concurrently with the increase in development activities and the emerging product launches.

Other external expenses were DKK 2.9m in Q1 2016 (Q1 2015: DKK 1.2m) and the increase is mainly due to the increase in marketing expenses.
Staff expenses excluding capitalized developments cost were DKK 1.2m in Q1 2016 (Q1 2015: DKK 0.4m) due to the strengthening of the sales organisation and the necessary enlargement of the administration as a consequence of being a listed company

EBITDA before special items ended up in a loss of DKK 3.3m in Q1 2016 (Q1 2015: loss of DKK 0.8m). The original forecast of DKK 2.9m was exceeded because of completion delays and marketing expenses for the newly launched games.

Depreciation and impairment for Q1 2016 were DKK 2.7m (Q1 2015: DKK 0.9m). The increase was related to depreciation of hard launched games and the larger backend system, which is the basis for a faster, cheaper and more effective development and management of games going forward.

Page 5
Hugo Games A/S - Interim report, Q1 2016
Page 6

Financial guidance for 2016

Hugo Games wishes to communicate about the future expectations in a normative way and finds that going forward a full year estimate and supplementary CEO letter in the quarterly reports, will describe the situation in a satisfactory manner. Guidance for specific quarters are subject to too high uncertainty, which also goes for user expectations.

Hugo Games retains its guidance for the full year. In 2016, Gross profit (equivalent to the earlier communicated "Net Revenue") is expected to be in the range of DKK 20-25m (2015: 3.2) and EBITDA before special items is expected to be in the range of DKK 3-7m (2015: -16.6).

The strong growth in Gross profit is based on a total release of nine new titles in 2016. Marketing efforts will differ from game to game and will be dependent of the speed of acknowledgement and this is also why the identified uncertainty in EBITDA is highly related to the uncertainty in Gross profit as most of the cost is fixed.

Our guidance is among many factors relying on not least the user feedback and metrics on the games being in soft launch. There is always a risk of delays in a global release and as such these delays may affect the financial result in a negative way. At any stage, the company will prioritize the pipeline of games in consideration of the long-term best value and pay-off for the company.

No significant changes were detected appertaining to the risks and uncertainty factors or the timing of product launches.

EBIT was a loss of DKK 6.0m in Q1 2016 against a loss of DKK 4.0m in Q1 2015.

Net financials were close to zero covering financial income from exchange rate adjustments and financial expenses to interest-bearing liabilities.

Loss before tax amounted to a loss of DKK 6.0m in Q1 2016 (Q1 2015: a loss of DKK 4.1). Tax for the period was an income of DKK 1.3 leading to a net loss for period of DKK 4.7m (Q1 2015: a loss of DKK 3.5).

Cash flow from operating activities still negative

Cash flow from operating activities totalled a loss of DKK 2.7m in Q1 2016 (Q1 2015: loss of DKK 0.7m) and cash flow from investing activities (mainly game development) had a negative cash impact of DKK 5.0m (Q1 2015: DKK 4.7m). Cash flow from financing activities totalled DKK 0.5m due to capital increase and repayment of loan.

Cash position at 31 March 2016 amounted to DKK 7.5m (Q1 2015: DKK 12.3m).

Total assets decreased compared to 31 December 2015

Total assets amounted to DKK 59.8m at 31 March 2016, a DKK m or 5% decrease compared to 31 December 2015. Investments in non-current assets (development) amounted to a total of DKK 5.0m in Q1 2016 (Q1 2015: DKK 4.7m).

The Group's equity at 31 March 2016 was DKK 48.3m. The equity increase compared to Q1 2015 is due to the flotation of the company. The equity ratio was 81% at 31 March 2016.

Events occurring after the balance sheet date

The Board of directors has decided to carry out a capital increase in July 2016

The company has entered into a worldwide exclusive agreement with American football quarterback and icon Cam Newton cf. company announcement no. 12 of 25 April 2016.

No other important events have occurred after the balance sheet date.

The forward-looking statements in this interim report reflect Management's current expectations for certain future events and financial results. Forward-looking statements are inherently subject to uncertainty, and actual results may therefore differ materially from expectations.

Factors that may cause actual results to deviate materially from expectations include, but are not limited to, changes in the mobile game market, market acceptance of new products as well as development delays.

Hugo Games at a glance

A Nordic, publicly traded mobile game company founded in 2011.
Creates, develops and publishes mobile games globally.
Has a consistent portfolio of games globally available across a wide range of platforms including iOS, Android, Windows, Amazon and Facebook.
Truly passionate about games and committed to making titles that will engage and bring genuine joy to people for years.
Forms strategic partnerships with high profile celebrities for increased visibility, awareness and product performance. For more information, go to: www.hugogames.com

Hugo Games A/S
Gammel Kongevej 120
1850 Frederiksberg C
Denmark
E-mail: [email protected]
Phone: +45 36 17 01 28
CVR no.: 3359 7142

220

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Hugo Games A/S - Interim report, Q1 2016
Page 8

Investor Relations communication

Conference call (audiocast)

A conference call for investors and financial analysts will be held today, 27 May at 10.00 CET. The Conference Call will also be available as live audiocast, at www.hugogames.com or direct link: https://player.eventcdn.net/silavo3. To attend the live presentation, use the phone in order to listen and ask questions – or use the Live link (audiocast) to listen and follow the presentation on your computer or any smart-device, from anywhere in the world.

Call in numbers:
NO: +47 23 50 02 54
DK: +45 35 44 55 83
UK: +44 2031 940 544
US: +1 855 269 2604

Announcements 2016

12-05-2016 AGM 2016 - Complete minutes
28-04-2016 Minutes of Annual General Meeting 2016
26-04-2016 Hugo Games soft-launches Christiano Ronaldo: Kick 'n' run
25-04-2016 Hugo Games partners with iconic NFL Quarterback Cam Newton
05-04-2016 Financial Calendar
05-04-2016 Hugo Games Annual General Meeting
04-04-2016 Annual Report 2015
31-03-2016 Full Year 2015 results: Invitation to Conference Call
14-03-2016 Hugo Games soft-launches Hugo Flower Flush in select territories
10-03-2016 Hugo Games releases "Hugo Troll Race 2" globally on iOS and Android
26-02-2016 Hugo Games releases "Axe in Face 2" globally on iOS and Android
26-02-2016 Hugo Games partners with American skateboard champion Nejaln Huston
04-02-2016 Share capital increase registered
27-01-2016 Hugo Games A/S completes capital increase
26-01-2016 Increase in share capital by Private Placement
21-01-2016 Minutes from Extraordinary General Meeting

Annual General Meeting 2016

At Hugo Games Annual General Meeting held on 28 April 2015, Bertel David Maigaard, Caspar Rose, Rasmus Lund and Christian Sand Kirk were re-elected to the Board of Directors. The company's website provides a description of the background and qualifications of the members of the Board of Directors.

The Annual General Meeting approved the Annual Report 2015 and the Board of Directors' proposal that no dividend be distributed for the year.

After the Annual General Meeting, the Board of Directors elected Bertel David Maigaard Chairman and Caspar Rose Vice-chairman.

A complete overview of the resolutions adopted is available at www.hugogames.com in company announcement no. 14/2016.

Financial Calendar 2016:

19-08-2016 Q2 2016 Financial Report
11-11-2016 Q3 2016 Financial Report

Email service

On Hugo Games website, it is possible to subscribe to our email service to receive annual reports, quarterly reports and other company announcements.

Statement by the Board of Directors and the Executive Board

The Board of Directors and the Executive Board have discussed and approved the interim report for the period 1 January - 31 March 2016 of Hugo Games Group.

The interim report has been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted by the EU, and additional Danish interim reporting requirements for listed companies. The interim report has been subject to review.

In our opinion, the interim report gives a true and fair view of the Hugo Games Groups' assets, liabilities and financial position at 31 March 2016, and of the results of the Hugo Games Group's operations and cash flows for the period 1 January - 31 March 2016.

We also find that the management's review provides a fair statement of developments in the activities and financial situation of the Group, financial results for the period and the financial position of the Group, and describes the significant risks and uncertainties pertaining to the Group.

Copenhagen, 27 May 2016

Executive Board

Henrik Jørgen Skouboe Kølle
CEO

Peter Ekman
CFO

Board of Directors

Bertel David Maigaard
Chairman

Caspar Rose
Deputy Chairman

Rasmus Lund
Christian Sand Kirk

Hugo Games A/S - Interim report, Q1 2016

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Hugo Games A/S - Interim report, Q1 2016
Page 10

Independent Auditors' review report

To the shareholders of Hugo Games A/S

We have reviewed the interim consolidated financial statements of Hugo Games A/S for the period 1 January 2016 – 31 March 2016 comprising income statement, statement of comprehensive income, balance sheet, cash flow statement and statement of changes in equity as well as selected explanatory notes, including summary of significant accounting policies (pages 10-16).

The Board of Directors' and the Management's responsibility for the interim consolidated financial statements

The Board of Directors and the Management are responsible for the preparation of interim consolidated financial statements in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU and Danish disclosure requirements for interim financial reporting of listed companies, and for such internal control as management determines is necessary to enable the preparation of interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express a conclusion on the interim consolidated financial statements based on our review. We conducted our review in accordance with the International Standard on Review of Interim Financial Information Performed by the Independent Auditor of the Entity and additional requirements under Danish Auditor regulation. This requires us to conclude whether anything has come to our attention that causes us to believe that the interim consolidated financial statements, taken as a whole, are not prepared in all material respects in accordance with the applicable financial reporting framework. This also requires us to comply with ethical requirements.

A review of interim consolidated financial statements in accordance with the International Standard on Review of Interim Financial Information Performed by the Independent Auditor of the Entity is a limited assurance engagement. The auditor performs procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate, and applying analytical procedures, and evaluates the evidence obtained.

The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on the interim consolidated financial statements.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim consolidated financial statements for the period 1 January 2016 – 31 March 2016 are not prepared in all material respects in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU and Danish disclosure requirements for interim financial reporting of listed companies.

Copenhagen, 27 May 2016

Grant Thornton
Statsautoriseret Revisionspartnerselskab

Ulrik Bloch-Sørensen
State Authorised Public Accountant

Martin Bornholtz
State Authorised Public Accountant

Consolidated statement of comprehensive income

DKK'000	Note	Q1 2016	Q1 2015	FY 2015
Revenue		792	909	3,198
Cost of sales		118	152	501
Gross profit		674	757	2,697
Other external expenses		2,862	1,167	15,636
Staff expenses		1,158	397	3,688
Loss before special items and depreciation (EBITDA)		-3,346	-807	-16,627
Special items		0	2,213	5,878
Depreciation, amortisation and impairment losses		2,668	938	11,404
Operating loss (EBIT)		-6,014	-3,958	-33,909
Financial income		134	0	12
Financial expenses		124	134	3,225
Loss before tax		-6,004	-4,092	-37,122
Tax on loss		-1,288	-600	-7,691
Net loss		-4,716	-3,492	-29,431
Other comprehensive income		0	0	0
Comprehensive income		-4,716	-3,492	-29,431
Distribution of comprehensive income:
Parent company's shareholders		-4,716	-3,492	-29,431
Non-controlling interests		0	0	0
		-4,716	-3,492	-29,431
Earnings per share:
Earnings per share (in DKK):	2	-0.187	-0.177	-1.302
Diluted earnings per share (in DKK)	2	-0.187	-0.177	-1.302

Hugo Games A/S - Interim report, Q1 2016

Page 12

Consolidated balance sheet

DKK'000	Note	31.03 2016	31.03.2015	31.12.2015
ASSETS
Non-current assets
Completed development projects	3	33,904	13,808	25,563
Acquired rights	3	259	92	274
Goodwill	3	762	762	762
Development in progress	3	8,947	24,563	14,975
Plant and equipment		57	15	64
Other receivables		65	77	65
Total non-current assets		43,994	39,317	41,703
Current Assets:
Trade receivables		604	639	234
Receivables from group companies		0	796	0
Income tax receivable		5,324	0	4,233
Other receivables		767	392	429
Prepayments		1,691	2,283	2,047
Cash		7,461	12,261	14,594
Total current assets		15,847	16,371	21,537
Total assets		59,841	55,688	63,240
EQUITY AND LIABILITIES
Equity:
Share capital		12,637	10,000	12,500
Share premium		813	0	0
Retained earnings		34,839	29,131	39,555
Total equity		48,289	39,131	52,055
Non-current liabilities
Provision for deferred tax		4	3,038	201
Payables to credit institutions		4,586	6,364	5,055
Total non-current liabilities		4,590	9,402	5,256
Non-current liabilities
Payables to credit institutions		1,867	1,338	1,836
Payables to group companies			0	0
Prepayments received from customers		94	94	94
Trade payables		3,234	4,577	2,274
Income tax payable		68	23	68
Other payables		1,699	1,123	1,657
Total current liabilities		6,962	7,155	5,929
Total liabilities		11,552	16,557	11,185
Total equity and liabilities		59,841	55,688	63,240

Hugo Games A/S - Interim report, Q1 2016

Consolidated statement of changes in equity

DKK'000	Share capital	Share premium	Retained earnings	Proposed dividend	Total equity
Equity as at 01.01.2016	12,500	0	39,555	0	52,055
Net loss			-4,716		-4,716
Other comprehensive income			0		0
Comprehensive income	0	0	-4,716	0	-4,716
Capital increase	137	863			1,000
Costs related to capital increase		-50			-50
Transactions with owners	137	813	0	0	950
Equity as at 31.03.2016	12,637	813	34,839	0	48,289
Equity as at 01.01.2015	10,000	4,986	21,888	0	36,874
Net loss			-3,492		-3,492
Other comprehensive income			0		0
Comprehensive income	0	0	-3,492	0	-3,492
Purchase of treasury shares			-750		-750
Group contribution in connection with purchase of treasury shares			749		749
Sale of treasury shares			5,750		5,750
Transfer		-4,986	4,986		0
Transactions with owners	0	-4,986	10,735	0	5,749
Equity as at 31.03.2015	10,000	0	29,131	0	39,131

Hugo Games A/S - Interim report, Q1 2016

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Hugo Games A/S - Interim report, Q1 2016
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Hugo Games A/S - Interim report, Q1 2016

Consolidated cash flow statement

DKK'300	Q1 2016	Q1 2015	FY 2015
Loss before tax	-6,004	-4,092	-37,122
Depreciation, amortisation and impairment losses	2,668	938	11,404
Financial income, reversed	-134	0	-12
Financial expenses, reversed	124	134	3,225
Change in working capital:	650	2,339	1,063
Operating cash flow	-2,696	-681	-21,442
Financial income, received	0	0	0
Financial expenses, paid	-110	0	-1,739
Income tax received	0	0	874
Cash flow from operating activities	-2,806	-681	-22,307
Purchase of property, plant and equipment	0	0	-64
Purchase of intangible assets	-4,959	-4,659	-17,459
Investments, net	0	0	12
Cash flow from investing activities	-4,959	-4,659	-17,511
Proceeds from cash capital increase	950	0	38,863
Disposal of treasury, shares	0	5,749	5,749
Credit institutions, repayment	-452	0	-807
Group companies, repayment	0	-106	-119
Cash flow from financing activities	498	5,643	43,686
Total cash flow for the period	-7,267	303	3,868
Cash, beginning of period	14,594	11,958	11,958
Net foreign exchange difference	134	0	-1,232
Cash, end of period	7,461	12,261	14,594

1. Basis of preparation

The interim report has been prepared in accordance with IAS 34 Interim financial reporting, as adopted by the EU, and additional Danish interim reporting requirements for listed companies. The Company's independent auditor has not reviewed the interim report.

The interim report does not include all the information and disclosures required in the annual consolidated financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December 2015.

Certain costs have been reclassified from costs of sales to other externals expenses.

Apart from the reclassification, the accounting policies adopted in the preparation of the interim report are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2015, as no new standards and interpretations have been implemented. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Significant accounting estimates and judgments

The most significant accounting estimates and judgments in the interim consolidated financial statements remain unchanged compared to those used in Annual Report 2015. The principles and key assumptions are described in the Annual Report 2015 in note 2.

2. Earnings per share

DKK'300	Q1 2016	Q1 2015	FY 2015
Net loss for the period	-4,716	-3,492	-29,431
Average number of shares	25,192,807	20,000,000	22,666,667
Average number of treasury shares	0	-280,220	-70,833
Average number of shares in circulation	25,192,807	19,719,780	22,595,834
Diluted average number of shares in circulation	25,192,807	19,719,780	22,595,834
Earnings per share of DKK 0,500 each (in DKK)	-0.187	-0.177	-1.302
Diluted earnings per share of DKK 0,500 each (in (DKK)	-0.187	-0.177	-1.302

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Hugo Games A/S - Interim report, Q1 2016
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Hugo Games A/S - Interim report, Q1 2016

Intangible assets

DRI'000	Completed developments projects	Acquired rights	Goodwill	Development projects in progress	Total
Costs as at 01.01.2016	42,176	300	762	14,975	58,213
Additions	231	0	0	4,729	4,960
Transfer	10,757	0	0	-10,757	0
Disposals	0	0	0	0	0
Costs as at 31.03.2016	53,164	300	762	8,947	63,173
Amortisation and impairment					0
losses as at 01.01.2016	16,613	26	0	0	16,639
Impairment losses					0
Amortisation	2,647	15	0	0	2,662
Amortisation and impairment
losses as at 31.03.2016	19,260	41	0	0	19,301
Carrying amount as at 31.03.2016	33,904	259	762	8,947	43,872
DRI'000	Completed developments projects	Acquired rights	Goodwill	Development projects in progress	Total
---	---	---	---	---	---
Costs as at 01.01.2015	18,818	100	762	21,074	40,754
Additions	1,169	0	0	3,490	4,659
Transfer	0	0	0	0	0
Disposals	0	0	0	0	0
Costs as at 31.03.2015	19,987	100	762	24,564	45,413
Amortisation and impairment
losses as at 01.01.2015	5,253	3	0	0	5,256
Impairment losses	0	0	0	0	0
Amortisation	926	5	0	0	931
Amortisation and impairment
losses as at 31.03.2015	6,179	8	0	0	6,187
Carrying amount as at 31.03.2015	13,808	92	762	24,564	39,226

Impairment test

Cash-generating units comprising goodwill and development projects in progress are tested for impairment at least once a year and more frequently in case of indications of impairment.

The recoverable amount is determined at a calculated value in use based on budgets and prognoses for the coming three financial years approved by the Board of Directors.

The group's budgets and prognoses for the coming three years and thus the determination of the recoverable amount of the cash-generating units are substantially impacted by the management's expectations for growth in connection with the launch of new games.

It is the assessment of the management that no indications of impairment of the Group's intangible assets exist.

4. Events occurring after the balance sheet date

The Board of directors has decided to carry out a capital increase in July 2016

The company has entered into a worldwide exclusive agreement with American football quarterback and icon Cam Newton cf. company announcement no. 12 of 25 April 2016.

No other important events have occurred after the balance sheet date.

Appendix 4 - Opinion from the Company auditor concerning the Companys forecasts

Independent Auditors' Report on Consolidated Prospective Financial Information

To shareholders and potential investors

We have been engaged to issue a report as to whether the consolidated prospective financial information for 2016 of Hugo Games A/S has been properly compiled on the basis stated and whether the basis of accounting used for the consolidated prospective financial information is consistent with the accounting policies of Hugo Games A/S.

The consolidated prospective financial information for 2016 is stated on page 126 of this Offering Circular. The basis is stated in the section "Methodology and Assumptions" below.

We will express reasonable assurance in our conclusion.

The expression "the basis of accounting used for the consolidated prospective financial information is consistent with the accounting policies of Hugo Games A/S" means that the consolidated prospective financial information has been prepared according to the accounting policies stated in the Audited Consolidated Financial Statements of Hugo Games A/S.

The purpose of the consolidated prospective financial information is to reflect the expected financial effect of the Company's management's action plans for 2016. Actual results are likely to be different from the results stated in the consolidated prospective financial information since anticipated events frequently do not occur as expected.

The consolidated prospective financial information has been prepared for the purpose of this Offering Circular, which has been prepared in accordance with Commission Regulation (EC) No 809/2004 as subsequently amended (the "Prospectus Regulation") and may therefore not be appropriate for another purpose.

Our report is issued in accordance with the Prospectus Regulation and has been prepared in accordance with generally accepted Danish practice for reports under the Prospectus Regulation and only for the use of the shareholders and potential investors in connection with the contemplated rights issue and subsequently trading and official listing on OSLO Axess of Shares in Hugo Games A/S and the public offering of some of these Shares.

Management's Responsibility

The Company's management is responsible for the proper compilation of the consolidated prospective financial information on the basis stated and for the basis of accounting used for the consolidated prospective financial information being consistent with the accounting policies of Hugo Games A/S.

Furthermore, the Company's management is responsible for selecting the assumptions underlying the consolidated prospective financial information.

Auditors' Responsibility

Our responsibility is, in accordance with the Prospectus Regulation, to express a conclusion as to whether the consolidated prospective financial information has been properly compiled on the basis stated and whether the basis of accounting used for the consolidated prospective financial information is consistent with the accounting policies of Hugo Games A/S.

We have performed our work in accordance with ISAE 3000 (revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information and additional requirements under Danish audit regulation.

Grant Thornton is subject to the International Standard on Quality Control, ISQC 1, and thus applies a comprehensive quality control system, including documented policies and procedures concerning compliance with ethical requirements, professional standards and current statutory requirements and other regulation.

We have compiled with the independence requirements and other ethical requirements included in FSR - Danish Auditors' guidelines for auditors' ethical behavior (Code of Ethics for Auditors) based on the basic principles of integrity, objectivity, professional competence as well as due diligence, confidentiality and professional behavior.

As part of our work, we have checked whether the consolidated prospective financial information has been properly compiled on the basis of the assumptions stated and according to the accounting policies stated in the Audited Consolidated Financial Statements of Hugo Games A/S, including checking of the numerical consistency of the consolidated prospective financial information.

Our work did not comprise an assessment of whether the assumptions applied are documented, well-founded and complete or whether the consolidated prospective financial information can be realised, and therefore we express no conclusion thereon.

Conclusion

Our conclusion is based on the understanding of the expression "the basis of accounting used for the consolidated prospective financial information is consistent with the accounting policies of Hugo Games A/S" as defined in the introduction to this report.

In our opinion, the consolidated prospective financial information for 2016 has been properly compiled on the basis stated and the basis of accounting used for the consolidated prospective financial information is consistent with the accounting policies of Hugo Games A/S.

Copenhagen, 22 June 2016

GRANT THORNTON

Statsautoriseret Revisionspartnerselskab

Ulrik Bloch-Sørensen

Martin Bornholtz

State Authorised Public Accountant

Appendix 5 - Hugo_subscription form

Hugo Games A/S RIGHTS ISSUE

SUBSCRIPTION FORM
Securities no. ISIN DK0060637999

General information: The terms and conditions of the Rights Issue by Hugo Games A/S (the "Company") are set out in the prospectus dated 22.06.2016 (the "Prospectus"). Terms defined in the Prospectus shall have the same meaning in this Subscription Form. The Company's articles of association and annual accounts and annual reports for the last two years are available at the Company's registered office address Gammel Kongevej 120 1th, 1850 Frederiksberg, Denmark and on the Company's website www.hugogames.com. The resolution to increase the share capital is included in the Prospectus. All announcements referred to in this Subscription Form will be made through Oslo Bank' information system under the Company's ticker "HUGO".

Subscription procedures: The subscription period will commence on 27 June 20016 and end on 11 July 2016 at 16:30 hours (CEST) (the "Subscription Period"). Correctly completed subscription forms must be received by the Manager set out below, or, in the case of online subscriptions, be registered by no later than 16:30 CEST on 11 July 2016: Norme Securities AS, Haskon Villa gate 9, 0161 Oslo, Norway (the "Manager"). Subscription forms received after the end of the Subscription Period and/or incomplete or incorrect subscription forms and any subscription that may be unlawful may be disregarded at the sole discretion of the Company and/or the Manager without notice to the subscriber. The subscriber is responsible for the correctness of the information filed in on the Subscription Form. Subscribers who are residents of Norway with a Norwegian personal identification number are encouraged to subscribe for Offer Shares through the VPS online subscription system by following the link on the following internet page: www.norne.no (which will redirect the subscriber to the VPS online subscription system). Persons or entities holding Shares in the Company through financial intermediaries (i.e., brokers, custodians and nominees), i.e. Danish shareholders or similar, should refer specifically to section 5.10 "Financial Intermediaries" in the Prospectus for instructions on how to subscribe for shares.

Subscriptions made through the VPS online subscription system must be duly registered before the expiry of the Subscription Period. Neither the Company nor the Manager may be held responsible for postal delays, internet lines or servers or other logistical or technical problems that may result in subscriptions not being received in time or at all by the Manager. Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the subscriber after having been received by the Manager, or in the case of applications through the VPS online subscription system, upon registration of the subscription.

Subscription Price: The Subscription Price in the Rights Issue is NOK 1.50 per Offer Share.

Subscription Rights: Shareholders who are registered in the Company's shareholder register in the VPS as of 24 June 2016 (the "Record Date") (the "Existing Shareholders") will be granted tradable Subscription Rights. Provided that the delivery of traded Shares was made with ordinary T+2 settlement in the VPS, Shares that were acquired on or before 22 June 2016 will give the right to receive Subscription Rights, whereas Shares that were acquired from and including 23 June 2016 will not give the right to receive Subscription Rights. Existing Shareholders will be granted 0.7913224220 Subscription Rights for every 1 Share in the Company held as of the Record Date. The number of Subscription Rights granted to each Existing Shareholder will be rounded down to the nearest whole Subscription Right. Subscription Rights will not be granted for the Shares held in treasury by the Company. Each Subscription Right will, subject to applicable securities laws, give the right to subscribe for and be allocated one (1) Offer Share in the Rights Issue. Oversubscription and subscription without Subscription Rights is permitted. Subscription Rights that are not used to subscribe for Offer Shares before the expiry of the Subscription Period, or that are not sold before 7 July 2016 at 16:30 hours (CEST) will have no value and will lapse without compensation to the holder.

Allocation of Offer Shares: The Offer Shares will be allocated to the subscribers based on the allocation criteria set out in the Prospectus. No fractional Offer Shares will be allocated. The Company reserves the right to round off, reject or reduce any subscription for Offer Shares not covered by Subscription Rights. Allocation of fewer Offer Shares than subscribed for by a subscriber will not impact on the subscriber's obligation to pay for the number of Offer Shares allocated. The Company or Manager may request a credit rating from a credit rating agency with regards to respective Subscribers before allocating shares to Subscribers not holding subscription rights. Notifications of allocated Offer Shares and the corresponding subscription amount to be paid by each subscriber are expected to be distributed in a letter on or about 13 July 2016. Subscribers having access to investor services through their VPS account manager will be able to check the number of Offer Shares allocated to them on 13 July 2016. Subscribers who do not have access to investor services through their VPS account manager may contact the Manager to get information about the number of Offer Shares allocated to them.

Payment: The payment for the Offer Shares allocated to a subscriber falls due on 15 July 2016. Subscribers who have a Norwegian bank account must, and will by signing the Subscription Form, or registering a subscription through the VPS online subscription system, provide the Manager, or someone appointed by them, with a one-time irrevocable authorisation to debit a specified bank account with a Norwegian bank for the amount payable for the Offer Shares which are allocated to the subscriber. The specified bank account is expected to be debited on or after the Payment Date. The Manager, or someone appointed by them, is only authorised to debit such account once, but reserves the right to make up to three debit attempts and the authorisation will be valid for up to seven working days after the Payment Date. Subscribers who do not have a Norwegian bank account must ensure that payment with cleared funds for the Offer Shares allocated to them is made on or before the Payment Date. Prior to any such payment being made, the subscriber must contact the Manager for further details and instructions. Overdue payments will be subject to interest and other terms will apply as set out under the heading "Overdue and missing payments" below. If a subscriber fails to comply with the terms of payment, the Offer Shares will, subject to the restrictions in the Norwegian Public Limited Liability Companies Act, not be delivered to the subscriber.

PLEASE SEE PAGE 2 OF THIS SUBSCRIPTION FORM FOR OTHER PROVISIONS THAT ALSO APPLY TO THE SUBSCRIPTION

DETAILS OF THE SUBSCRIPTION

Subscriber's VPS account:	Number of Subscription Rights:	Number of Offer Shares subscribed (incl. over-subscription):	(For broker: consecutive no.):
SUBSCRIPTION RIGHTS SECURITIES NUMBER: ISIN DK0060739050		Subscription Price per Offer Share: NOK 1.50	Subscription amount to be paid: NOK

IRREVOCABLE AUTHORIZATION TO DEBIT ACCOUNT (MUST BE COMPLETED BY SUBSCRIBERS WITH A NORWEGIAN BANK ACCOUNT)

Norwegian bank account to be debited for the payment for Offer Shares allocated (number of Offer Shares allocated x NOK 1.50).	(Norwegian bank account no.)

I/we hereby irrevocably (i) subscribe for the number of Offer Shares specified above subject to the terms and conditions set out in this Subscription Form and in the Prospectus, (ii) authorize and instruct the Manager (or someone appointed by it) acting jointly or severally to take all actions required to transfer such Offer Shares allocated to me/us to the VPS Registrar and ensure delivery of the beneficial interests to such Offer Shares to me/us in the VPS, on my/our behalf, (iii) authorize Norme Securities AS to debit my/our bank account as set out in this Subscription Form for the amount payable for the Offer Shares allocated to me/us and (iv) confirm and warrant to have read the Prospectus and that I/we are eligible to subscribe for Offer Shares under the terms set forth therein.

Place and date

must be dated in the Subscription Period.

Binding signature

The subscriber must have legal capacity. When signed on behalf of a company or pursuant to an authorization, documentation in the form of a company certificate or power of attorney must be enclosed.

INFORMATION ON THE SUBSCRIBER - ALL FIELDS MUST BE COMPLETED

First name
Surname/company
Street address
Post code/district/country
Personal ID number/organization number
Nationality
E-mail address
Daytime telephone number

228

ADDITIONAL GUIDELINES FOR THE SUBSCRIBER

Regulatory issues: In accordance with the Markets in Financial Instruments Directive ("MFID") of the European Union, Norwegian law imposes requirements in relation to business investments. In this respect, the Manager must categorize all new clients in one of three categories: eligible counterparties, professional clients and non-professional clients. All subscribers in the Rights Issue who are not existing clients of the Manager will be categorized as non-professional clients. Subscribers can, by written request to the Manager, ask to be categorized as a professional client if the subscriber fulfils the applicable requirements of the Norwegian Securities Trading Act. For further information about the categorization, the subscriber may contact the Manager. The subscriber represents that he/she/it is capable of evaluating the merits and risks of a decision to invest in the Company by subscribing for Offer Shares, and is able to bear the economic risk, and to withstand a complete loss, of an investment in the Offer Shares.

Selling Restrictions: The attention of persons who wish to subscribe for Offer Shares is drawn to Section 4.7 (Selling and Transfer Restrictions) of the Prospectus. The Company is not taking any action to permit a public offering of the Subscription Rights or the Offer Shares (pursuant to the exercise of the Subscription Rights or otherwise) in any jurisdiction other than Norway and Denmark. Receipt of this Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, this Prospectus is for information only and should not be copied or redistributed. Except as otherwise disclosed in this Prospectus, if an investor receives a copy of this Prospectus in any territory other than Norway or Denmark, such investor may not treat this Prospectus as constituting an invitation or offer to it, or a grant of, nor should the investor in any event deal in Subscription Rights or Offer Shares (as the case may be), unless, in the relevant jurisdiction, such an invitation, offer or grant could lawfully be made to that investor, or the Subscription Rights or Offer Shares, as applicable, could lawfully be dealt in without contravention of any unfulfilled registration or other legal requirements. The Subscription Rights and Offer Shares being granted and offered, respectively, in the Rights Issue have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not and will not be offered, sold, exercised, pledged, resold, granted, delivered, allocated, taken up, transferred or delivered, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the U.S. Securities Act and in compliance with the applicable securities laws of any state or jurisdiction of the United States.

The Subscription Rights or Offer Shares may not be offered, sold, exercised, pledged, resold, granted, allocated, taken up, transferred or delivered, directly or indirectly, in or into, Member States of the EEA that have not implemented the Prospectus Directive, Canada, Japan, Australia, Hong Kong or any other jurisdiction in which it would not be permissible to offer the Subscription Rights or the Offer Shares. This Subscription Form does not constitute an offer to sell or a solicitation of an offer to buy Offer Shares in any jurisdiction in which such offer or solicitation is unlawful. A notification of exercise of Subscription Rights and subscription of Offer Shares in contravention of the above restrictions may be deemed to be invalid. By subscribing for the Offer Shares, persons effecting subscriptions will be deemed to have represented to the Company that they, and the persons on whose behalf they are subscribing for the Offer Shares, have complied with the above selling restrictions.

Execution Only: The Manager will treat the Subscription Form as an execution-only instruction. The Manager is not required to determine whether an investment in the Offer Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the relevant conduct of business rules in accordance with the Norwegian Securities Trading Act.

VPS account and mandatory anti-money laundering procedures: The Rights Issue is subject to the Norwegian Money Laundering Act No. 11 of 6 March 2009 and the Norwegian Money Laundering Regulations No. 302 of 13 March 2009 (collectively the "Anti-Money Laundering Legislation"). Subscribers who are not registered as existing customers of the Manager must verify their identity to the Manager in accordance with requirements of the Anti-Money Laundering Legislation, unless an exemption is applicable. Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the subscription form are exempted, unless verification of identity is requested by the Manager. Subscribers who have not completed the required verification of identity prior to the expiry of the Subscription Period will not be allocated Offer Shares. Further, participation in the Rights Issue is conditional upon the subscriber holding a VPS account. The VPS account number must be stated in the subscription form. VPS accounts can be established with authorised VPS registrars, who can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. However, non-Norwegian investors may use nominee VPS accounts registered in the name of a nominee. The nominee must be authorised by the Norwegian Financial Supervisory Authority (Nw. Finanstilsynet). Establishment of a VPS account requires verification of identification to the VPS registrar in accordance with the Anti-Money Laundering Legislation.

Terms and conditions for payment by direct debiting - securities trading: Payment by direct debiting is a service the banks in Norway provide in cooperation. In the relationship between the payer and the payer's bank the following standard terms and conditions apply:

a) The service "Payment by direct debiting - securities trading" is supplemented by the account agreement between the payer and the payer's bank, in particular Section C of the account agreement, General terms and conditions for deposit and payment instructions.

b) Costs related to the use of "Payment by direct debiting - securities trading" appear from the bank's prevailing price list, account information and/or information given in another appropriate manner. The bank will charge the indicated account for costs incurred.

c) The authorization for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank that in turn will charge the payer's bank account.

d) In case of withdrawal of the authorization for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian Financial Contracts Act the payer's bank shall assist if the payer withdraws a payment instruction that has not been completed. Such withdrawal may be regarded as a breach of the agreement between the payer and the beneficiary.

e) The payer cannot authorize payment of a higher amount than the funds available on the payer's account at the time of payment. The payer's bank will normally perform a verification of available funds prior to the account being charged. If the account has been charged with an amount higher than the funds available, the difference shall immediately be covered by the payer.

f) The payer's account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorization for direct debiting, the account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the authorization has expired as indicated above. Payment will normally be credited the beneficiary's account between one and three working days after the indicated date of payment/delivery.

g) If the payer's account is wrongfully charged after direct debiting, the payer's right to repayment of the charged amount will be governed by the account agreement and the Norwegian Financial Contracts Act.

Overdue and missing payments: Overdue payments will be charged with interest at the applicable rate under the Norwegian Act on Interest on Overdue Payment of 17 December 1976 No. 100; 8.75% per annum as of the date of the Prospectus. If the subscriber fails to comply with the terms of payment or should payments not be made when due, the subscriber will remain liable for payment of the Offer Shares allocated to it and the Offer Shares allocated to such subscriber will not be delivered to the subscriber. In such case the Company and the Manager reserve the right to, at any time and at the risk and cost of the subscriber, re-allot, cancel or reduce the subscription and the allocation of the allocated Offer Shares, or, if payment has not been received by the third day after the Payment Date, without further notice set, assume ownership to or otherwise dispose of the allocated Offer Shares in accordance with applicable law. If Offer Shares are sold on behalf of the subscriber, such sale will be for the subscriber's account and risk and the subscriber will be liable for any loss, costs, charges and expenses suffered or incurred by the Company and/or the Manager as a result of, or in connection with, such sales. The Company and/or the Manager may enforce payment for any amounts outstanding in accordance with applicable law.

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5th Planet Games A/S — Capital/Financing Update 2016

8162_rns_2016-06-24_077edf97-5e0a-4512-bc21-7fe0de0156d6.pdf

Important notice

Note Regarding Forward-Looking Statements

TABLE OF CONTENTS

DANSK RESUME

ENGLISH SUMMARY

Hugo Games A/S SHARE SECURITIES NOTE

1. RISK FACTORS

1.1 Risk factors relating to the Company - Operational risks

Limited operating history

Competition

Attraction and retention of key personnel

Disputes

Loss of reputation

Changes in current tax regulations

Collaborations and licensing arrangements

Termination of partner contracts

Intellectual property rights (IPR)

1.2 Risk factors relating to the Company - Financial risks

Operating losses

Ability to raise additional capital

Macroeconomic fluctuations

Changes in interest rates

Currency rate fluctuations

Development

1.3 Risk factors relating to the Company - Market risks

Highly competitive markets

Brand awareness and recognition

End-users’ tastes

Inferior virtual deck placement

Technology

Revenue streams

1.4 Risk factors relating to the Company - Other risks

Trade barriers

Political Events

1.5 Risk factors material to the securities

Price volatility of publicly traded securities

Future sales of Shares

Limited free float of the Shares

Potential dilution of shareholders

Nominee accounts and voting rights

The ability to bring an action against the Company may be limited under Danish law

The Company does not intend to pay dividends for the foreseeable future, and investors in this Offering may be forced to sell their Shares in order to realize a return on their investment

Shareholders outside of Norway are subject to exchange rate risk

Shareholders outside of Denmark are subject to exchange rate risk

1.6 Risk factors material to the Rights Issue

The interests of the Company’s major shareholders could be different from those of other investors or the Company

Pre-emptive rights may not be available to U.S. or other shareholders

Existing Shareholders who do not participate in the Rights Issue may experience significant dilution in their shareholding

An active trading market in Subscription Rights may not develop on the Oslo Stock Exchange and/or the market value of the Subscription Rights may fluctuate

If the Rights Issue is withdrawn or for any reason not carried out, the Subscription Rights will no longer be of value

2. RESPONSIBILITY STATEMENT

2.1 Persons responsible for the Prospectus

3. KEY INFORMATION

3.1 Working capital statement

3.2 Capitalization and indebtedness

3.3 Interest of natural and legal persons involved in the Rights Issue

3.4 Reasons for completion of the Rights Issue

4. INFORMATION CONCERNING THE SECURITIES TO BE OFFERED/ADMITTED TO TRADING

4.1 Description of the type and the class of the Shares

4.2 Legislation

4.3 Registration of Shares, proof of ownership

4.4 Rights attached to the Shares

Dividend rights

Voting rights

Pre-emptive rights

Rights of redemption and repurchase of shares

Distribution of assets on liquidation

4.5 Resolutions, authorisations and approvals

4.6 Issue date for the shares in the Rights Issue

4.7 Restrictions on the free transferability of Shares

Selling restrictions

United Kingdom

European Economic Area

Transfer restrictions

Danish law

Norwegian law

4.8 Public takeover bids

5th Planet Games A/S Capital/Financing Update 2016