Huuuge Inc.

M&A Activity • Mar 18, 2024

Current Report No. 13/202417 March 2024Conclusionof agreements regarding the investment in Bananaz Studios Ltd.Huuuge,Inc. (the "Issuer") hereby announces that on 17 March 2024 (the "SigningDate") the Issuer concluded: (i) a simple agreement for future equity(the "SAFE") with Bananaz Studios Ltd., with its seat in Tzur Yitzhak,State of Israel ("Bananaz"); and (ii) a call option deed agreement (the"Call Option Deed") with Bananaz and its shareholders, including thefounders of Bananaz (collectively, the "Transaction Documents")._#160;Bananaz currently operates "Slots Cash", a product that the Issuer viewsas attractive and complementary to its core social casino business.Under the SAFE, the Issuer undertook to invest in Bananaz up to USD6,000,000 in exchange for the future right to receive newly issuedshares in Bananaz (the "Payment"). The Payment will be split into twotranches: (i) payment of the first tranche in the amount of USD3,500,000 was ordered on the Signing Date; and (ii) the second tranchein the amount of USD 2,500,000 shall be payable following theachievement by Bananaz of certain key performance indicators indicatedin the SAFE, or at the Issuer's sole discretion, during the periodcommencing 9 months and ending 18 months after the Signing Date (the"Second Tranche"). The Issuer will be investing in Bananaz at apre-money valuation of USD 16,500,000. Bananaz will primarily use theproceeds to grow its team, execute on the roadmap for Slots Cash, andinvest in user acquisition. The SAFE provides for the conversion of thePayment into shares in Bananaz's share capital upon the occurrence ofthe certain conversion events referred to in the SAFE, including theexercise of the Call Option (as defined below)._#160; In accordance with theprovisions of the Call Option Deed, the Issuer is granted the right (notan obligation) to acquire the entire issued share capital of Bananaz(existing or future) together with all rights attached thereto (the"Call Option Shares", the "Call Option"). The Issuer is entitled toexercise the Call Option at any time following the investment of theSecond Tranche and ending on the date falling 24 months following thedate of the investment of the Second Tranche. The price of the CallOption Shares shall be paid in two instalments._#160; The first instalmentshall be calculated based on the EBITDA of Bananaz adjusted by adetermined multiplier and by certain balance sheet and other itemsoutlined in the Call Option Deed. However, in any case the price for theCall Option Shares will not be lower than USD 20 million for all theshares in the share capital of Bananaz (including the shares which willbe issued to the Issuer according to the SAFE), before theabove-mentioned agreed adjustments. The first instalment shall bepayable at the completion of the Call Option._#160; The size of the secondinstalment will be determined based on a multiple of future EBITDA ofBananaz, or a multiple of future EBITDA and future revenue of Bananaz intandem and will be the difference between the value calculated usingthis methodology, and the first instalment (the "DeferredConsideration"). The Deferred Consideration attributable to the founders(not all of the sellers) is subject to a time base vesting mechanism andlinked to their employment by Bananaz on a full-time basis. The DeferredConsideration will be paid within 10 days following the lapse of 36months after the payment of the first instalment. Furthermore, from theSigning Date, the Issuer is granted typical rights of a minorityshareholder, including but not limited to: the right to appoint onedirector to the Board of Directors of Bananaz, certain Board ofDirectors and shareholder' reserved matters; and information rights. TheTransaction Documents are governed by English law. Legal basis: Article17(1) of the Regulation (EU) No. 596/2014 of the European Parliament andof the Council of 16 April 2014 on market abuse (market abuseregulation) and repealing Directive 2003/6/EC of the European Parliamentand of the Council and Commission Directives 2003/124/EC, 2003/125/ECand 2004/72/EC - confidential information.