ANNUAL REPORT

Warsaw, March 14

th

, 2024

Disclaimer

This constitutes the Annual report for the twelve-month period ended December 31, 2023 (the “Annual Report”) prepared in

accordance with the Regulation of the Minister of Finance of March 29, 2018 on current and periodic information published by

issuers of securities and the conditions for recognizing information as equivalent required by the law of a non-member state. This

Annual Report should be read along with the consolidated and separate financial statements as at and for the year ended

December 31, 2023 prepared in accordance with International Financial Reporting Standards as adopted by the European Union

(“IFRS”).

Since the separate data for Huuuge, Inc. and the consolidated data for the Huuuge Group are similar (trends are maintained for

individual balance sheet and result items), the Board of Directors and Management perform and present a joint analysis for the

separate and consolidated data.

Unless implied otherwise in this Annual Report, the terms “we” or the “Group”, refer to the Company together with all of its

subsidiaries and the term the “Company” or “Issuer”, refers to Huuuge, Inc.

Unless indicated otherwise, references to statements as to beliefs, expectations, estimates and opinions of the Company or its

management refer to the beliefs, expectations, estimates and opinions of the Company’s Board of Directors.

Certain arithmetical data contained in this Annual Report, including financial and operating information, have been rounded.

Therefore, in certain instances, the sum of the numbers in a column or a row in tables contained in this Annual Report may not

conform exactly to the total figure given for that column or row.

Industry and Market Data

This Annual Report may include market share and industry data that we obtained from various third-party sources, including

publicly available information concerning global social gaming industries. The information in this Annual Report that has been

sourced from third parties has been accurately reproduced with reference to these sources in the relevant paragraphs and, as far

as we are aware and able to ascertain from the information published by that third party, no facts have been omitted that would

render the reproduced information provided inaccurate or misleading. Where third-party information has been sourced in this

Annual Report, the source of such information has been identified. To the extent these industry publications, surveys and

forecasts are accurate and complete, we believe we have correctly extracted and reproduced the information from such sources.

Additionally, industry publications, surveys and forecasts generally state that the information contained therein has been obtained

from sources believed to be reliable but that the accuracy and completeness of such information is not guaranteed and in some

instances state that they do not assume liability for such information. We cannot therefore assure you of the accuracy and

completeness of such information, and we have not independently verified such information.

Further, in many cases, statements in this Annual Report regarding our industry and our position in the industry are based on our

experience and our own investigation of market conditions. Comparisons between our reported financial or operational

information and that of other companies operating in our industry using this information may not fully reflect the actual market

share or position in the market, as such information may not be defined consistently or reported for all companies from our

industry in line with how we define or report such information in this Annual Report.

While we are not aware of any mis-statements regarding the industry data presented herein, our estimates involve certain

assumptions, risks and uncertainties and are subject to change based on various factors.

Key Performance Indicators

Certain KPIs included in this Annual Report, including DAU, MAU, DPU, MPU, ARPDAU, ARPPU and Monthly Conversion, are

derived from management estimates, are not part of our financial statements or financial accounting records and have not been

audited or otherwise reviewed by independent auditors, consultants or experts.

Our use or computations of these KPIs may not be comparable to the use or computations of similarly titled measures reported

by other companies in our industry, by research agencies or by market reports. For that reason, comparisons using this

information may not be reliable. Other companies, research agencies or market reporters may include other items or factors in

their calculation of similar metrics and may use certain estimates and assumptions that we do not use when calculating these

metrics. These factors may cause the calculations by others of similar metrics to differ substantially from our calculations if their

methodologies were used to calculate our KPIs. The KPIs are not accounting measures, but management believes that each of

these measures provides useful information concerning the usage and monetization patterns of our games, and the costs

associated with attracting and retaining our players. None of the KPIs should be considered in isolation or as an alternative

measure of performance under IFRS, and their inclusion in this Annual Report does not mean that the Issuer will continue to

report these KPIs in the future.

Forward-looking statements

The Annual Report includes forward-looking statements, which include all statements other than statements of historical facts,

including, without limitation, any statements preceded by, followed by or that include the words “targets,” “believes,” “expects,”

“aims,” “intends,” “will,” “may,” “anticipates,” “would,” “could” or similar expressions or the negative thereof. Such forward-looking

statements involve known and unknown risks, uncertainties and other important factors beyond our control that could cause our

actual results of operations, financial condition or prospects to materially differ from any of those expressed or implied by such

forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and

future business strategies and the environment in which we currently operate and will operate in the future. These forward-looking

statements speak only as at the date of the Annual Report. We have no obligation and have made no undertaking to disseminate

any updates of or revisions to any forward-looking statements contained in this Annual Report unless we are required to do so

under the applicable laws.

Investors should be aware that several important factors and risks may cause our actual results of operations to differ materially

from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements.

Table of contents

CEO Letter

4

SELECTED CONSOLIDATED FINANCIAL DATA

5

SELECTED SEPARATE FINANCIAL DATA

6

2023 IN BRIEF

8

RESULTS 2018–2023

9

About us

10

Corporate structure of the Group

12

Gaming market

14

Strategy

15

Research and development

16

Significant achievements or failures and unusual events significantly affecting the financial statements

19

Factors affecting our results

20

Key performance indicators

22

Results of operations (P&L)

26

Statement of financial position

32

Cash flows and liquidity

33

Current and projected financial situation

34

Separate results of operations

35

Additional information

38

GOVERNANCE

39

Shares and shareholding structure

40

General Meetings

43

Board of Directors

44

Officers; Executive management

48

Auditor

49

Risk factors

50

Best practices

59

Internal control and risk management

63

Related parties

64

Rules for amending the issuer’s certificate of incorporation

65

Changes in the basic principles of management

65

Identification of significant court cases

65

GLOSSARY

68

BOARD OF DIRECTORS’ STATEMENTS

69

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

This version is a pdf of the executed xHTML Annual Report for the 12-month period ended December 31, 2023. In case of any

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3

CEO Letter

Dear Shareholders, Team Huuuge,

I am pleased to present Huuuge's Annual Financial Report for 2023. Despite facing a continuously turbulent market, we have

managed to achieve record-high profits, a significant headcount and cost reduction, and we have been able to stabilize or grow

underlying operating KPIs. Our adjusted EBITDA achieved a record high USD 108 million, while our net operating cash flow

amounted to USD 82 million. This demonstrates not only our resilience but also our ability to thrive amidst challenges.

Furthermore, we have executed a substantial Share Buyback Program valued at $150 million, underscoring our commitment to

delivering value back to our shareholders.

In 2023 we prioritized profitability over the pursuit of revenue growth. This calculated strategy influenced our core franchises,

Huuuge Casino and Billionaire Casino, which realized $272.2 million in revenue—a strategic adjustment resulting in a 6% decline

from the previous year.

Our core games demonstrated stability, with operating KPIs leveling and core Daily Active Users (DAU) experiencing growth for

three consecutive quarters. Notably, key monetization metrics: Average Revenue Per Daily Active User (ARPDAU) and Average

Revenue Per Paying User (ARPPU) saw increases for both Huuuge Casino and Billionaire Casino, appropriately of 8% and 13%

YoY. These improvements position our core franchises as leaders in the social casino market in terms of monetization

performance. Furthermore, our Direct-To-Consumer channel has demonstrated success, with revenues reaching a peak of

$16.6 million, nearly tripling 2022 figures.

As we look ahead to 2024, we are setting plans in motion to increase the marketing investment for our core franchises. This

increase in marketing expenditure is not only an evidence to our continuous commitment to our flagship games but also reflects

our improved marketing capabilities.

2024 marks a year of innovation for our core products. Innovation has always been the cornerstone of success for our games,

setting us apart in the competitive market. Huuuge has made a name for itself in the social casino world by bringing new ideas

and adding a social layer that builds on the solid foundation of proven core gameplay. In 2023, we invested considerable effort

to realign our studio with its innovative roots. As a result, we aim to introduce features to the social casino space that embody

innovation and social interaction — the very essence of what Huuuge has always been about.

We'll continue investing in 'Huuuge Pods' as a key part of our growth strategy. Building new games is hard and time-consuming,

but we're committed to this path. We plan to test new games in the coming years and will increase marketing for those showing

promise. We are truly excited about the new games we're currently developing.

Our approach towards shareholders, players, and employees has remained unchanged. As always, we greatly value your

feedback and support. We continue to work towards serving more players globally and we hope you’ll enjoy playing together

with Huuuge.

Best regards,

Wojciech Wronowski, CEO

–

Huuuge, Inc.

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

This version is a pdf of the executed xHTML Annual Report for the 12-month period ended December 31, 2023. In case of any

discrepancies xHTML version shall prevail.

4

SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents selected financial data of the Group.

USD

USD

EUR

EUR

PLN

PLN

in thousand USD

12m`2023

12m`2022

12m`2023

12m`2022

12m`2023

12m`2022

Revenue

283,444

318,622

262,118

302,284

1,190,118

1,415,200

Operating profit (loss)

94,073

38,608

86,995

36,628

394,991

171,482

Pre-tax profit (loss)

98,765

39,054

91,334

37,051

414,692

173,463

Net profit (loss)

82,178

32,008

75,995

30,367

345,047

142,168

Net cash flows from

operating activities

82,420

70,957

76,219

67,319

346,063

315,164

Net cash flows from

investing activities

4,123

(32,555)

3,813

(30,886)

17,312

(144,597)

Net cash flows from

financing activities

(155,021)

(21,847)

(143,357)

(20,727)

(650,898)

(97,036)

Total net cash flows

(68,478)

16,555

(63,326)

15,706

(287,524)

73,531

Cash and cash

equivalents at the end of

period

152,110

222,245

137,662

208,583

598,553

978,191

Number of shares at the

end of period

67,124,778

84,246,697

67,124,778

84,246,697

67,124,778

84,246,697

Weighted average

number of shares

71,252,841

80,389,472

71,252,841

80,389,472

71,252,841

80,389,472

Earnings per share basic

(EPS)

1.15

0.40

1.06

0.38

4.83

1.78

The following table sets out the exchange rates of our main currencies against the USD as at the end of 2022 and 2023 and the

annual average exchange rates for those years.

EUR

PLN

EUR

PLN

12m`2023

12m`2023

12m`2022

12m`2022

Annual average exchange rate

1.0814

0.2382

1.0540

0.2251

Exchange rate at the end of the

reported period

1.1050

0.2541

1.0655

0.2272

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

This version is a pdf of the executed xHTML Annual Report for the 12-month period ended December 31, 2023. In case of any

discrepancies xHTML version shall prevail.

5

SELECTED SEPARATE FINANCIAL DATA

The following table presents selected financial data of the Company.

USD

USD

EUR

EUR

PLN

PLN

in thousand USD

12m`2023

12m`2022

12m`2023

12m`2022

12m`2023

12m`2022

Revenue

1,577

2,922

1,458

2,772

6,621

12,978

Operating profit (loss)

152,940

-7,493

141,433

(7,109)

642,161

(33,281)

Pre-tax profit (loss)

155,809

(6,883)

144,086

(6,530)

654,207

(30,572)

Net profit (loss)

154,251

(7,712)

142,645

(7,317)

647,665

(34,254)

Net cash flows from operating activities

142,092

(3,522)

131,401

(3,341)

596,612

(15,643)

Net cash flows from investing activities

2,915

569

2,696

540

12,239

2,527

Net cash flows from financing activities

(150,575)

(17,628)

(139,246)

(16,724)

(632,231)

(78,297)

Total net cash flows

(5,568)

(20,581)

(5,149)

(19,526)

(23,379)

(91,413)

Cash and cash equivalents at the end of

period

80,532

86,210

72,883

80,910

316,893

379,445

Number of shares at the end of period

67,124,778

84,246,697

67,124,778

84,246,697

67,124,778

84,246,697

Weighted average number of shares

71,252,841

80,389,472

71,252,841

80,389,472

71,252,841

80,389,472

The following table sets out the exchange rates of our main currencies against the USD as at the end of 2022 and 2023 and the

annual average exchange rates for those years.

EUR

PLN

EUR

PLN

12m`2023

12m`2023

12m`2022

12m`2022

Annual average exchange rate

1.0814

0.2382

1.0540

0.2251

Exchange rate at the end of the reported period

1.1050

0.2541

1.0655

0.2272

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

This version is a pdf of the executed xHTML Annual Report for the 12-month period ended December 31, 2023. In case of any

discrepancies xHTML version shall prevail.

6

BUSINESS

Management Report on the Group’s and the Company’s Activities

for the 12-month period ended December 31, 2023

2023 IN BRIEF

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

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8

RESULTS 2018–2023

Huuuge, Inc.

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About us

Business profile

Huuuge, Inc. (the “Company”, “Huuuge”) is registered in the United States of America. Huuuge’s registered office is in Dover,

Delaware, 850 New Burton Road, Suite 201, DE 19904. The Company was formed February 11, 2015.

Huuuge is a global game developer and publisher on a mission to build the world’s most social real-time, free-to-play mobile

games portfolio. We strive to become the global leader in real-time free-to-play casual gaming, we aim to redefine the

experience to give maximum joy and fun to players all around the world. Huuuge’s games provide entertainment every month to

millions of players from 174 countries and are available in 32 languages. Huuuge shares have been listed on the Warsaw Stock

Exchange since February 2021.

Key products

Huuuge develops and publishes games that are easy to play, great for small breaks and longer sessions alike, and designed

around our social-first, “play together” ethos. The social-first nature of our games is based primarily upon the ability of our

players to chat, play and compete with one another in-game, and in real time. The concept of playing alongside others is central

to the Group’s approach to game design. We are one of the market leaders in implementing real-time multiplayer mechanics at

scale in social casino games.

Our core franchises are Huuuge Casino and Billionaire Casino. Together, they generate 96% of Huuuge’s total revenues. Our new

franchises generate 4% of total revenues and include different titles at various stages of their life cycle.

Huuuge Casino:

The game was launched in June 2015. It is Huuuge’s flagship title responsible for

64% of total 2023 revenue and for USD ~1.3 billion in lifetime revenue. Huuuge Casino was a true

pioneer with its mobile-first user experience and real-time PvP-style gameplay. We believe that it

was the first social casino game to introduce features such as clubs to the realm of social casino

games. Huuuge Casino offers players over 100 casino slot machines, as well as card games and

roulette. The game enables players to join a club and compete in a Billionaire League, with

multiplayer slots where they can play with friends and compete against each other. Huuuge Casino

is ranked #21 (Apple App Store) and #10 (Google Play) among social casino apps in the United

States by revenue as of December 31, 2023.

Huuuge, Inc.

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Billionaire Casino:

The game was launched in October 2016. Revenue has grown rapidly since its

release. It has achieved over USD 0.6 billion of lifetime revenue and constitutes 32% of our total

2023 revenues. Due to its aesthetic, which is different from that of Huuuge Casino, Billionaire

Casino is targeted at a different player base in terms of demographics. Similar to Huuuge Casino,

Billionaire Casino offers players a number of casino slot machines, card games and roulette.

Billionaire Casino allows players to create a club with their friends or join a club and meet new

people while playing slot machines. Also, the game allows players to participate in club events by

playing slots and other casino games. Billionaire Casino is ranked #31 (App Store) and #20 (Google

Play) among social casino apps in the United States by revenue as of December 31, 2023.

New titles

In Q1 2023, we created four small internal teams,

called “Pods”, responsible for agile prototyping and

development of new games. Their exploration is

focused on new games with attributes that play to

our strengths and reflect market conditions, namely:

●

Multiplayer games with natural

word-of-mouth distribution

●

Games with highly shareable moments

●

Socially-oriented long-term retention

drivers

●

Games with high accessibility and

universal appeal

●

Language and platform agnostic.

While development works are still at an early stage,

we have tech launched two titles recently, and we

might move them into soft launch in the coming

months provided the test results show commercial

promise.

Group structure

As of December 31, 2023, the Huuuge Group (“Group”) comprised the Company (the parent entity), five direct subsidiary

companies wholly owned and controlled by the Company and seven indirect subsidiaries wholly controlled by the Company

through Huuuge Global Ltd. with its registered seat in Cyprus. All companies are consolidated using the full method.

MDOK GmbH and Huuuge Labs GmbH, the Group’s two remaining German subsidiaries, remain in voluntary liquidation

commenced in 2022 as of date of this Annual Report and approval of this Annual Report for publication.

Huuuge Mobile Games Limited remains in voluntary liquidation commenced in 2022 as of date of this Annual Report and

approval of this Annual Report for publication. Coffee Break Games United Limited, which commenced voluntary liquidation in

2022, was finally dissolved effective January 24, 2024.

Please find below the current corporate structure of the Group, indicating the chain of ownership and the percentage shares in

the share capital of each of the entities respectively.

Huuuge, Inc.

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Corporate structure of the Group

Huuuge, Inc.

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Offices & Locations

We are a global organization with a global team located in 7 offices across the globe and powered by a team of 450 people and

a culture of innovation and teamwork. Our team consists of employees from over 15 nationalities.

REST OF THE WORLD

~7 employees

TOTAL:

450

Huuuge, Inc.

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Gaming market

According to Newzoo, in 2023, the gaming industry proved its resilience and continued to grow, reaching a market value of

$184.0 billion with a slight increase of 0.6% from the previous year. The industry's success is driven by a growing number of

gamers, now over 3.3 billion globally, with a particular focus on mobile and PC gaming as the main sources of revenue. Looking

ahead, the industry is expected to keep on growing, with Newzoo projections suggesting it will reach $205.7 billion by 2026.

This anticipated growth speaks to the industry's ability to adapt and innovate, especially in game development and

monetization strategies.

As

reported

by

Data.ai,

in

2023,

the

mobile gaming market experienced a 2%

decrease

in

consumer

spending,

amounting

to

$107.3

billion,

with

downloads

also

seeing

a

decline

to

around 88 billion. Several reasons stand

for this decrease.

In 2023 our industry

was

affected

by

a

combination

of

economic pressures, changing consumer

habits, and market saturation. Economic

factors

like

higher

interest

rates

and

recession fears led to reduced spending

by consumers and advertisers. The end

of the pandemic-era boom, which had

temporarily

inflated

the

market,

also

contributed

to

a

correction

phase.

Additionally, the crowded market space

and

increased

competition

made

it

harder for games to stand out, affecting overall revenue. Additionally, in the last two years, the industry has been navigating

through regulatory changes, particularly Apple's adjustments to its IDFA protocol, which significantly impacted targeted

advertising strategies.

The social casino market, as reported by Eilers & Krejcik (E&K), experienced a slight downturn of 1.6% to $7.34 billion in 2023,

with a decline in daily active users (DAUs) being partially offset by an increase in conversion rates. The forecast now

anticipates a -0.4% compound annual growth rate (CAGR) from 2023 to 2027, indicating a minor downward adjustment from

previous projections.

Despite the recent trajectory, the overall games market remains robust. Newzoo expects the market to grow at a 1.3% CAGR

through to 2026. Within mobile we remain optimistic on the outlook on the back of strong fundamentals. The Covid effect has

largely dissipated. We are bullish that the long-term factors supporting the growth of the industry remain true: (1) population

growth and mainstream prevalence of gaming amongst all demographics and geographies; (2) innovation in gameplay,

technology & monetization; (3) continued adoption of mobile devices in emerging markets along with growth in GDP per capita

(and therefore propensity to spend).

Although IDFA deprecation remains a challenge, the industry at large, and we at Huuuge, are actively working on finding better

ways to do UA and thereby find new players and payers for our games. This includes optimizing UA further via campaign

automation and Real-Time Bidding “RTB” tools, as well optimization of our marketing mix. We are also finding ways to better

recognize our core demographic through their actions in-game (via the work we are doing on payer and churn predictions).

Whilst the environment remains uncertain, we have cut back UA spend. However, as the market environment improves, and

Huuuge (along with the industry) finds better ways to connect advertising dollars with the right eyeballs, we anticipate that we

will be well positioned for growth and expect UA spend to gradually increase going forward.

We are conscious that growth often also comes in the form of new innovative gameplay, which cannot be forecasted. In this

context we are also refocusing our efforts on building fun new games and experiences. This requires experience in not only

building great core loops, but also embedding a meta layer, designing complex game economies and managing live operations.

We have a vision of the kinds of dynamic multiplayer experiences we would like to build and a skill-set in many of the areas

highlighted.

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

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14

$184.0bn

Size of the Global Games Market

49%

Mobile Share of Total Market

0.6%

2023 YoY Total Market Growth

(1.6%)

2023 YoY Mobile Market Decline

6.3%

Total Player Growth vs 2022

87.9bn

2023 Mobile Games Downloads

1.3%

‘21-’26 Total Market CAGR%

(0.4)%

‘23 - ‘27 Social Casino Market CAGR%

Sources: Newzoo, data.ai, Eilers & Krejcik

Strategy

Our vision is to transform mobile gaming into a massively social experience. Our mission is to empower billions of people to

play together.

We plan to achieve our vision and mission by focusing on the following objectives:

Focusing on our large captive user base within our Core Franchises

In 2022, due to macro environment and legal changes, our approach to the mobile gaming market has evolved strategically.

We’ve focused on monetizing and retaining our existing player base. This shift included the implementation of a profit-oriented

strategy, where we intentionally reduced marketing and user acquisition (UA) spending. This decision led to a significant

decrease in daily active users (DAU). At the same time we observed a considerable increase in average revenue per daily active

user (ARPDAU) and average revenue per paying user (ARPPU). In 2023 we’ve continued this strategy and a reasonable

approach to marketing spend.

We have a proven track record and deep expertise in engaging and monetizing our users effectively. Despite the reduction in

user acquisition efforts, we've managed to enhance the rate at which players convert to payers. Our commitment is to further

concentrate on monetizing and retaining these players. Our strategy is underpinned by our core strengths: developing new

content, delivering an exceptional multiplayer social experience, and leveraging our capabilities in game economy management

and live operations. These elements are crucial as we adapt to the changing dynamics of the gaming industry and strive for

sustainable growth.

In 2024 we plan a substantial increase in our marketing expenditure for core franchises: Huuuge Casino and Billionaire Casino.

This strategy underscores our dedication to our flagship games and our evolving marketing capabilities.

Organizing our new build activities into Pods

In Q1 2023, we created four small internal teams, called “Pods”, responsible for agile prototyping and development of new

games. Their exploration is focused on new games with attributes that play to our strengths and reflect market conditions,

namely:

Huuuge, Inc.

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●

Multiplayer games with natural word-of-mouth distribution

●

Games with highly shareable moments

●

Socially-oriented long-term retention drivers

●

Games with high accessibility and universal appeal

●

Language and platform agnostic.

While development works are still at an early stage, we have tech launched two titles recently, and we might move them into

soft launch in the coming months provided the test results show commercial promise.

Expanding our activities in the casual games subgenre

Due to the above two points, we intend to introduce new games in the casual gaming subgenre across various categories by

leveraging our strengths in social feature development, player monetization, and player retention via live-operation offerings

within our games. In this way, we hope to offer our best-in-class social experiences to an ever-broadening user base within the

casual games subgenre.

Optimization of marketing activities in conjunction with our Technology team

The user acquisition market environment has evolved significantly over the past 24 months. Install attribution has become

much more challenging, and, as a result, a data-science-led approach to understanding marketing performance is necessary.

We intend to evolve how we measure, with a greater focus on macro-level performance. Simultaneously, we are also widening

the scope of our marketing efforts to incorporate new activities such as branding and influencer marketing.

Leverage our technology and data services to continue margin expansion

Our business is built on a data-centric approach, focused on our Huuuge Data Services system, which we will continue to refine

and expand as we grow. We plan to continue to expand our profitability margins with a focus on data-driven decision-making

and technology. We believe that our organizational architecture; namely our centralized service structures, data-centricity, and

operating locations, which enable us to employ first-class human and technology resources at lower costs than our

competitors, will allow us to achieve exceptional profitability levels.

In 2023, Huuuge integrated Generative AI to achieve faster outputs, cost savings, and heightened creativity, enabling the

generation of vast amounts of gaming content at a fraction of traditional costs. The application of AI spans various use cases,

including communication, data management, creative design, research, and technical support. This strategic incorporation of AI

not only streamlines operations but also fosters a data-driven culture and enhances product development, marking generative

AI as a core component of Huuuge's DNA for future growth.

Accessing best-in-class talent from around the world

Across our history, we have focused considerable time and resources on building a team with diverse experience and

backgrounds and a positive, stimulating business culture. We are present in the most important gaming hubs in the world and

we employ people from all over the world, which allows us to create the inclusive and diversified environment that is required to

successfully operate in our industry. We benefit from our presence in Central and Eastern Europe, a region with a deep talent

pool. We have cultivated an ecosystem within the industry that allows us to identify leading talent globally.

Research and development

We believe our ability to attract new players and retain existing players depends in part on our ability to evolve and expand our

content library by continually developing differentiated games, systems technology and functionality to enhance the quality of

player entertainment.

Our research and development expenditures amounted to USD 22,008 thousand in 2023 compared to USD 29,577 thousand in

2022. The decrease in expenses was driven mainly by a decrease in the cost of salaries and employee stock options of the R&D

team (decreases of USD 4,174 thousand and USD 965 thousand, respectively), which reflects the decrease in headcount of the

team. Additionally, other research and development costs decreased by USD 1,900 thousand, largely due to the scale of external

R&D support being greater in 2022.

Huuuge, Inc.

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16

Below are several key strategic initiatives in this area:

Web-based store for in-game purchases

Our continuously growing direct-to-consumer (D2C) web store has been upgraded significantly to be more mobile friendly, allow

for more payment methods across the globe, and enable further A/B testing capabilities. Rolling out the D2C store to a larger

audience as well as continuously optimizing the player experience remains an ongoing priority.

In-game personalization

In the previous years, we’ve rolled out personalization of the game economies for players, adapting features and in-game

currencies to individual players as opposed to only segments of players. We’ve further invested in personalization by improving

our AI models and broadening the scope of personalized in-game features. We will continue to invest in personalization to

improve players’ experiences and to allow for broader targeting in user acquisition campaigns.

Generative AI

The company has rolled out various generative AI initiatives across the company, focusing on improving efficiency of

development, art work, as well as supporting unit functions. AI has been at the core of our core products for many years

already, such as machine learning and neural networks, and will continue to be an integral part of our tech stack and operations.

We’re taking a common sense approach to generative AI, focusing on specific use cases that provide additional business value,

while not overinvesting in areas that don’t significantly improve it.

Security and stability

We have continued our investments in security and stability of our applications by sunsetting more legacy software,

implementing more security monitoring software, and simplifying our technology stack in general. This will remain an ongoing

priority given the importance of security and stability to our business.

Huuuge, Inc.

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17

FINANCIALS

& KPIs

Significant achievements or failures and unusual events

significantly affecting the financial statements

Group reorganization and focus on efficiency

We made significant changes in our operating setup throughout the 2023, namely:

●

We sunset the Traffic Puzzle studio and put the game in maintenance mode. Part of the TP team stayed with the

company and formed one of our new Pods (teams focused on prototyping and building new games);

●

We reorganized and downsized our Marketing department to match our lower spend on performance marketing and

our shift in focus. We are exploring other channels such as influencer marketing and brand marketing and are

planning to increase spend on those activities;

●

We concluded the collective redundancies at Huuuge Games sp. z o.o. and reduced our headcount across our other

subsidiaries as well.

As a result of the above initiatives, our headcount at the Group level at the end of 2023 was ~23% lower than the level at the

end of 2022. H1 2023 costs related to the headcount reductions amounted to USD 1,640 thousand and there were no additional

costs recognized in H2 2023. We have also streamlined and flattened our organizational structure, having merged our

Technology and Content teams into the Huuuge Casino Studio.

We are actively looking at reducing complexity and improving processes across the whole organization, both in our core

revenue-generating activities and in supporting functions.

Completion of a Share Buyback

On July 4, 2023 (as announced in our Current Report 25/2023) we settled the Share Buyback (SBB). As a result of the

settlement of the acquisition and transfer of ownership of the shares offered in response to a time-limited invitation to submit

to the Company sale offers relating to shares in the Company, at a pre-determined and fixed price per share, open to all

shareholders of the Company (the "Invitation") (the "SBB") announced by the Company on 30 May 2023 in the current report n

o

.

19/2023 (as subsequently amended and announced by the Company in current report n

o

23/2023 on 19 June 2023), the

Company acquired 17,121,919 of its common shares that represent 20.32% of the share capital of the Company and that

entitled their holders to exercise 21.42% of the total number of votes at the general meeting of the Company for a total

consideration of USD 149,999,996. The settlement of the SBB took place outside the organized system of trading in financial

instruments through IPOPEMA Securities S.A. The acquisition was made at a gross price of USD 8.7607. Amounts due to

investors, after withholding of applicable taxes, have been converted from USD to PLN in accordance with the interbank

exchange rate applicable as of 3 July 2023 (as the day preceding the Settlement Date), which is 4.0735. On August 29, 2023, in

accordance with Section 243 of the Delaware General Corporation law, the Board of Directors adopted a resolution on the

retirement of 17,121,919 shares of common stock (as announced in our Current Report 37/2023). The retirement is effective as

of the adoption of the resolution by the Board of Directors.

Retirement of shares purchased by the Issuer during the share buyback

On August 29, 2023, in accordance with Section 243 of the Delaware General Corporation law, the Board of Directors adopted a

resolution on the retirement of 17,121,919 shares of common stock of the Issuer representing 20.3% of the issued share capital

of the Company comprising of 84,246,697 shares. The shares that were subject to the retirement were purchased by the

Company during the share buyback with the intention for the shares to be retired, with the exception to the shares necessary, in

the Company’s view, to satisfy its ongoing needs under the Company’s employee stock option plans.

Effective as of the adoption of the resolution of the Board of Directors, the retired shares resumed the status of authorized and

unissued shares of the common stock of the Issuer. At the same time, the Issuer’s issued share capital decreased from

84,246,697 to 67,124,778 shares. Further, following a review, the Board of Directors concluded that such a high authorized capital

is not necessary and therefore the Board of Directors decided that it will recommend that at the next Annual General Meeting the

shareholders approve an amendment to the Huuuge, Inc. Certificate of Incorporation to decrease the authorized capital of the

Issuer by 21,128,984 shares of common stock of the Issuer, as a result reducing the total number of the authorized shares from

Huuuge, Inc.

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19

113,881,420 to 92,752,436 where 67,124,778 will be the issued shares and 25,627,658 authorized and unissued shares. The

authorized and unissued shares in the amount of 25,627,658 will be used, among others, for the Issuer’s employee stock option

plans. The proposal of the Board of Directors has not received a required majority of votes at Annual General Meeting of the

Company held on October 27, 2023, and the authorized share capital remained at 113,881,420.

Factors affecting our results

Core franchises continue to improve profitability

Starting from Q2 2023, we have witnessed slight QoQ growth in our Core franchises’ user base. Sales profit and sales profit

margin for the full year 2023 in our core portfolio slightly increased YoY. Continued cash generation and longevity of core

franchises is our operational priority. We also continue to expand our direct-to-consumer offering (Webshop), which allows us to

further improve our margins.

Creating of Pods and new approach to new game development

In Q1 2023 we created four small internal teams, called “Pods”, responsible for agile prototyping and development of new games.

Their exploration is focused on new games with attributes that play to our strengths and reflect market conditions, namely: (1)

Multiplayer games with natural word-of-mouth distribution; (2) Games with highly shareable moments; (3) Socially-oriented

long-term retention drivers; (4) Games with high accessibility and universal appeal; (5) Language and platform agnostic. While

development works are still at an early stage, we have tech launched two titles recently, and we might move them into soft launch

in the coming months provided the test results show commercial promise.

Mobile gaming and social casino market environment

As far as market dynamics are concerned, Eilers & Krejcik estimate that the social casino market declined by 2.9% YoY in Q4 2023

(and declined by 1.1% QoQ). The long-term forecast has been revised downwards in Q4 2023. The social casino market is

expected to decline at a 0.4% CAGR in 2023-27E (with a USD 7.2 billion market by 2027). Eilers & Krejcik forecast the category to

decline by 0.9% YoY in 2024 (following a downward revision of the forecast in Q4 2023).

User Acquisition expenses and post-IDFA mobile advertising market update

User acquisition expenses were adapted to support the new, post-IDFA reality, such that budgets have been shifted to partners

with better post-change performance, and overall spend has been reduced, with a focus instead on monetizing and retaining our

large captive audience. Additionally, we have focused on driving greater profitability through other initiatives, such as rolling out

an expanded VIP program and moving to new payment channels (Webshop). From a marketing perspective, we have increasingly

focused on how we do things, making measurement and a single source of truth central to our goals. Leveraging technology to

drive adoption of new measurement methods such as incrementality has become crucial to operating a successful marketing

organization. We have significantly decreased overall UA spend YoY, both for our Core franchises and for Traffic Puzzle, where the

marketing spend is still largely immaterial and focused mostly on retargeting inactive players.

In 2024 we plan a substantial increase in our marketing expenditure for core franchises: Huuuge Casino and Billionaire Casino.

This strategy underscores our dedication to our flagship games and our evolving marketing capabilities.

Expected introduction of Google’s Privacy Sandbox

Google’s Privacy Sandbox is a strategic move to enhance user privacy, to be launched probably in the middle of 2024, the date not

confirmed yet. Google intends to phase out the Google Advertising ID (GAID) for all users eventually, though the discontinuation of

GAID is not currently included in Google's Privacy Sandbox initiatives. The phase-out is anticipated to not occur before next year

(2025).

Consequently,

there

will

be

a

transitional

period

during

which

it

will

be possible to measure Android traffic

deterministically, as is the current practice, and through Google's Privacy Sandbox. This overlap will provide an opportunity to

compare the effectiveness of both approaches.

The discontinuation of GAID will restrict app developers' ability to track specific conversion events, for which Google's Privacy

Sandbox is intended to serve as a remedy. Although plans are in place to phase out GAID, the Google Play referrer, an alternative

method of attribution based on the App Set ID, will likely continue to be available. This could offer an alternative to GAID, though

its efficacy and applicability in the post-GAID era will require further validation. Sandbox will send aggregated event data with

added noise points for privacy. The contribution budget influences data accuracy in the Sandbox, with higher budgets yielding

more precise results. Google assures clients that the changes won’t drastically impact their ad business. Pre-Sandbox efforts

Huuuge, Inc.

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20

include continuous development of Media-Mix-Modeling (MMM) for allocating organic users and assessing the influence of

marketing networks. Additionally, Huuuge is set to be among the initial testers of the Privacy Sandbox on Android through

participation in the Google Ads Early Access Program & AppsFlyer Sandbox beta version testing.

Expected tax reforms & changes in tax law / tax law interpretations

The debate on international taxation has started with focus on the concepts of digital taxation and minimum taxation. The course

of the debate also impacted the plan with respect to the shape of the income tax reform in the United States. At the moment there

are many proposals with respect to tax law in US including the Administration’s plans, however, none of the legislation that is

currently pending refer to revision of GILTI mechanism or higher corporate tax rates i.e. changes that may affect the global

effective tax rate of the Group and may have a negative impact on our financial results.

Impact of the situation in Israel on our business

Huuuge’s office in Tel Aviv, Israel accounts for around 10% of the Group’s total headcount, which includes senior management of

our Huuuge Casino Studio. On October 7, 2023, Hamas militants conducted a series of coordinated attacks from the Gaza Strip

against the Israeli people, resulting in the outbreak of war between the State of Israel and Hamas. Moreover, Israel is engaged in

ongoing hostilities with Hezbollah in Lebanon. Some of our employees in Israel are obliged to perform military reserve duty and, in

certain emergency circumstances, such employees may be called to immediate and unlimited active duty. As a result of Israel’s

October 7, 2023 declaration of a state of war and activation of Article 8 of the Reserve Service Law (2008), several of our

employees in Israel were activated for military duty. Currently, only one employee has been called up for military service. Any

major escalation in hostilities in the region could result in a portion of our employees and service providers in Israel being called

up to perform military duty for an extended period. The Company is actively monitoring the situation and has established an

internal task force developing and implementing business continuity measures. Contingency plans are in place to prevent

disruptions to business, including Israeli teams working from home and one employee temporarily moved outside of the country.

Our technology infrastructure is critical to supporting the performance of our games, ensuring uptime and redundancy. All of our

games operate on cloud, maintained through data centers and availability zones in the US and the EU. We have no Israel-based

personnel responsible for infrastructure. As of the date of the report, the war in Israel has no significant impact on our business

and financial results.

Legal cases in the gaming industry

Over the past 3 years, Epic Games initiated legal battles against Apple and Google, challenging their control over the mobile app

economy. The case against Google resulted in a jury ruling that Google's app store policies were monopolistic. Conversely, Epic's

similar claims against Apple were largely dismissed. These mixed outcomes underscore the complexity of app store dynamics

and hint at possible changes in how apps are distributed and monetized, potentially affecting pricing and innovation in the mobile

app market.

EU's Digital Markets Act & Apple's new App Store policy

The European Union's Digital Markets Act (DMA), passed in July 2022, marks a crucial step towards promoting fair competition

and curtailing the dominance of big tech companies. This law targets digital "gatekeepers," aiming to enhance interoperability,

encourage data sharing, and prevent self-preferencing to create a more competitive and open digital market. It's designed to

benefit consumers and small businesses by increasing choice and innovation.

In response to the European Union's Digital Markets Act (DMA), Apple has announced significant adjustments to its terms and

conditions for EU developers, scheduled to coincide with the launch of iOS 17.4 in March. EU Developers are presented with the

option to adhere to Apple’s current business terms or transition to the new terms, a decision that appears to be permanent. The

new terms include an adjusted pricing model that appears to reduce Apple's commission rates on most in-app purchases by EU

players. The standard commission rate will be lowered from 30% to 17%. However a new 3% “Payment Processing Fee'' will be

added, as well as a Euro 0.5 “Core Technology Fee” for each annual install of an app above 1 million installs. Other notable

changes in the new terms include allowing EU developers to “link out” to payment options other than Apple’s own in-app payment

process, and allowing alternative app stores other than Apple’s own App Store on iphones for EU users.

Huuuge is tracking Apple's recent updates, including those to App Store policies, new hardware features, and privacy protections.

To date, these changes have not significantly affected Huuuge's business operations or strategy.

Huuuge, Inc.

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21

Except for events and factors described in the Financial and KPI sections, there were no other unusual events with an impact on

the Issuer’s financial results.

Key performance indicators

When evaluating our business, we consider the key performance indicators (KPIs) presented and discussed in this section.

Each of these KPIs is defined below:

●

Daily Active Users (DAU):

DAU is defined as the number of individual users who played a game on a particular day. In

order to more accurately reflect reality, we identify the users based on (human) ID (HID) rather than device ID. That

allows us to eliminate the double counting of individuals playing games on multiple devices. The ability to identify and

analyze actual players rather than accounts allows for substantially greater accuracy, including better in-game targeting

of offers (the right offer, to the right person, at the right time), better retargeting capabilities and better predictive

models. Average DAU for a period is the average of the monthly average DAU for the period. It is not a KPI that we

internally use as an objective (we focus primarily on the number of paying users – e.g., DPU).

●

Daily Paying Users (DPU):

DPU is defined as the number of players (active users) who made a purchase on a given day.

●

Average Revenue per Daily Active User (ARPDAU):

ARPDAU is defined as average revenue per daily active user.

ARPDAU for a period is calculated by dividing gross revenue (i.e., before deduction of platform fees) for the period by

the number of days in the period and then dividing by the average DAU for the period

.

●

Daily Average Revenue per Paying User (ARPPU):

ARPPU is defined as average revenue per paying user on a given day.

It is calculated by dividing gross revenue from in-app purchases (i.e., before deduction of platform fees) for the period

by the number of days in the period and then dividing by the average DPU for the period. ARPPU for the period is

calculated by dividing IAP revenue for the period by the number of days in the period and then dividing by the average

DPU for the period.

●

Monthly Payer Conversion (Monthly Conversion):

Monthly Conversion is defined as the percentage of MAU (the

number of individual users who played a game during a particular month) that made at least one purchase in a month

during the same period.

Our revenue is principally driven by DAU, ARPPU and conversion rates. We monitor our user acquisition costs using measures

such as ROAS (Return on Ad Spend), but given that these metrics are commercially sensitive we do not disclose or discuss

them in this report.

The table below presents our KPIs for 2023 and 2022 for the Group and core franchises, i.e. Huuuge Casino and Billionaire

Casino.

All games

Core franchises

Huuuge Casino and Billionaire Casino

KPI

2023

2022

2023

2022

DAU (in thousand)

429.7

610.5

334.1

380.8

DPU (in thousand)

16.7

22.3

15.2

18.1

ARPDAU (in USD)

1.8

1.4

2.2

2.1

ARPPU (in USD)

46.0

38.0

49.1

43.5

Monthly Conversion (%)

8.0%

6.3%

9.8%

9.7%

The table below presents our KPIs for Q4 2023 and Q4 2022 for the Group and core franchises, i.e. Huuuge Casino and

Billionaire Casino.

Huuuge, Inc.

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22

All games

Core franchises

Huuuge Casino and Billionaire Casino

KPI

Q4 2023

Q4 2022

Q4 2023

Q4 2022

DAU (in thousand)

408.1

510.7

334.7

356.8

DPU (in thousand)

16.1

19.9

15.0

17.4

ARPDAU (in USD)

1.9

1.7

2.2

2.2

ARPPU (in USD)

47.7

41.7

50.2

45.9

Monthly Conversion (%)

7.7%

7.9%

8.9%

10.9%

In addition, below we present a more detailed quarterly overview of our selected KPIs.

Daily Active Users

The chart shows Daily Active Users (DAU) for our flagship and new games, highlighting a long-term decline in DAU for main

titles, in line with the social casino genre's downturn over five years. However, DAU stabilized or grew for these games from Q2

2023, while new titles saw a significant DAU drop from Q1 2023. Q4 2023 saw a 2% QoQ and 20% YoY DAU decrease, mainly

from new franchises, with Traffic Puzzle experiencing a notable decline due to reduced marketing. Overall, 2023 saw a 30% YoY

DAU decrease, with new titles down 55% YoY and core games down 12% YoY, largely due to fewer installations from

scaled-back marketing"

The chart below presents DAU for our core and new franchises for the periods indicated:

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Daily Paying Users

In 2023 the overall number of daily paying users was 25% lower compared to 2022, mainly due to significant decrease in DPU

for new franchises. The 62% decline in DPU for new franchises was driven by a gradual decline of the Traffic Puzzle payer base

(driven by falling marketing spend). In Q4 2023 the number of daily paying players was 2.5% lower compared to the previous

quarter. There was a slight decrease in DPU QoQ in core franchises in Q4 2023 (with signs of stabilization over the past three

quarters), broadly in line with the DAU trend for the period.

The chart below presents DPU for our core and new franchises for the periods indicated:

Average Revenue per Daily Active User

ARPDAU indicates how well we monetize our games taking into account our whole player base. Thanks to our competences in

live operations, as well as our analytical forecasting tools, we have seen sustained growth in the monetization of our core

games, i.e. Huuuge Casino and Billionaire Casino. These two games continued to exhibit ARPDAU rates significantly exceeding

the category averages and we saw this KPI improving further to USD 2.2 in 2023 (+8% YoY). ARPDAU for our new franchises

has decreased in 2023 by 16% YoY up to USD 0.33. In the Q4 2023, overall ARPDAU decreased slightly by 1.3% QoQ, with 1.3%

lower ARPDAU in core franchises and 3.5% lower QoQ ARPDAU in new franchises.

The chart below presents ARPDAU for our core and new franchises for the periods indicated:

Huuuge, Inc.

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Daily Average Revenue per Paying User

In recent years, we have been able to consistently improve the ARPPU of our core franchises owing to the social features of our

games as well as constant focus on live events and special offers. In 2023, we saw a 21% YoY increase at the Group level. Our

ARPPU in the core franchises increased by 13% YoY. In the Q4 2023, our ARPPU increased slightly QoQ both at the Group level

and for our core franchises. Our core ARPPU remains consistently at the top levels in the social casino category.

The chart below presents ARPPU for our core franchises games for the periods indicated:

Monthly conversion

Monthly Conversion is an indicator of our ability to convert players into payers. Monthly Conversion for all games grew from

6.3% in 2022 to 8.0% in 2023. This came from a YoY improvement in both core franchises and new franchises. In Q4 2023,

Monthly Conversion decreased slightly to 7.7%, from 7.9% in Q3 2023, mainly due to an expanding number of installations and a

rise in daily active users (DAU), along with enhanced player diversification across regions beyond the United States. We believe

that growing conversion is more beneficial for the longevity of our portfolio than driving revenue through increasing ARPPU. We

also note that our core portfolio conversion metrics are also among the best-in-class in the social casino space.

The chart below presents Monthly conversion for our core and new franchises for the periods indicated:

Huuuge, Inc.

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25

Results of operations (P&L)

The following table presents our consolidated statement of comprehensive income for the two periods of twelve months ended

December 31, 2023 and 2022, respectively, and for the two periods of three months ended December 31, 2023 and 2022,

respectively (“Q4 2023” and “Q4 2022”).

in thousand USD

12m`2023

12m`2022

Change, %

Q4`2023

Q4`2022

Change, %

Revenue

283,444

318,622

-11.0%

71,333

77,674

-8.2%

Cost of sales

(82,569)

(96,886)

-14.8%

(20,522)

(23,630)

-13.2%

Gross profit/(loss) on sales

200,875

221,736

-9.4%

50,811

54,044

-6.0%

Sales and marketing expenses

(50,155)

(88,814)

-43.5%

(14,460)

(13,849)

4.4%

including user acquisition marketing campaigns

(35,337)

(73,725)

-52.1%

(10,422)

(10,081)

3.4%

including general sales and marketing expenses

(14,818)

(15,089)

-1.8%

(4,038)

(3,768)

7.2%

Research and development expenses

(22,008)

(29,577)

-25.6%

(4,533)

(6,450)

-29.7%

General and administrative expenses

(34,463)

(39,611)

-13.0%

(8,887)

(9,749)

-8.8%

Impairment of intangible assets

-

(26,087)

-

-

-

-

Other operating income/(expense), net

(176)

961

-

(299)

324

-

Operating result

94,073

38,608

143.7%

22,632

(1,767)

-

Finance income

5,842

2,172

-169.0%

1,366

1,279

6.8%

Finance expense

(1,150)

(1,726)

-33.4%

(646)

242

-366.9%

Profit/(loss) before tax

98,765

39,054

152.9%

23,352

(246)

-

Income tax

(16,587)

(7,046)

135.4%

(3,936)

(608)

547.4%

Net result for the period

82,178

32,008

156.7%

19,416

(854)

-

Exchange gains/(losses)

1,908

(2,912)

-

2,619

2,482

5.5%

Total comprehensive income for the period

84,086

29,096

189.0%

22,035

1,628

-

The following tables show the Alternative Performance Measures used by us as at the dates and for the periods indicated,

followed by a justification for their use. Please see below the definitions of the measures and ratios used.

in thousand USD

12m`2023

12m`2022

Change, %

Q4 2023

Q4 2022

Change, %

EBITDA

103,131

49,688

107.6%

24,874

1,207

-

EBITDA margin (%)

36.4%

15.6%

20.8pp

34.9%

1.6%

33.3pp

Adjusted EBITDA

108,233

82,295

31.5%

26,098

29,720

-12.2%

Adjusted EBITDA margin (%)

38.2%

25.8%

12.4pp

36.6%

38.3%

-1.7pp

Sales Profit

165,538

148,011

11.8%

40,389

43,963

-8.1%

Sales Profit margin (%)

58.4%

46.5%

11.9pp

56.6%

56.6%

0pp

User acquisition marketing campaigns as % of

revenue

12.5%

23.1%

-10.7pp

14.6%

13.0%

1.6pp

Adjusted Net Result

87,280

64,615

35.1%

20,640

27,659

-25.4%

Adjusted Net Result (%)

30.8%

20.3%

10.5pp

28.9%

35.6%

-6.7pp

EBITDA

,

Adjusted EBITDA

,

EBITDA margin

,

Adjusted EBITDA margin

,

Sales profit

,

Sales profit margin

and

User acquisition cost

as % of revenue

are supplemental measures of the financial and operating performance used by us that are not required by, or

prepared in accordance with IFRS. These measures are prepared by us because we believe they provide a view of our recurring

operating performance that is unaffected by our capital structure and allow us to readily view operating trends and identify

Huuuge, Inc.

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26

strategies to improve operating performance and to assist investors and analysts in comparing our performance across reporting

periods on a consistent basis by excluding items that we do not believe are critical to our core operating performance. In

evaluating these measures, you should be aware that, in the future, we may incur expenses that are the same as or similar to

some of the adjustments in this presentation. Our presentation of these measures should not be construed as an inference that

our future results will be unaffected by unusual or non-recurring items. Our use of each of these measures is as follows:

●

We define

EBITDA

as the net result for the year adjusted for income tax, finance costs, finance income, and

depreciation and amortization. The rationale for using the

EBITDA

is that it is a measure widely used by securities

analysts, investors and other interested parties to evaluate the profitability of companies.

EBITDA

eliminates potential

differences in performance caused by variations in capital structures (affecting finance costs and finance income), tax

positions (such as the availability of net operating losses that offset taxable profits), the costs and ages of property,

plant and equipment (affecting the depreciation expense level) and the extent to which intangible assets are identifiable

(affecting the amortization expense level).

●

We define

Adjusted EBITDA

as

EBITDA

adjusted for events not related to the main activity of the Group. In the periods

presented, i.e. 2022 and 2023 there were share-based payment expenses, provision for litigation, costs related to

strategic options review and impairment of intangible assets. The rationale for using the

Adjusted EBITDA

is that it

constitutes an attempt to show the

EBITDA

result after eliminating events not related to the main activity of the Group

and items from the profit and loss account that are of a non-cash nature.

●

We define

EBITDA margin

as the ratio of the

EBITDA

to Revenue. The rationale for using the

EBITDA margin

is that it is

a measure of operational profitability widely used among securities analysts and investors, and that

EBITDA

and

EBITDA margin

are internal measures used by us in the process of budgeting and management accounting.

●

We define

Adjusted EBITDA margin

as the ratio of

Adjusted EBITDA

to Revenue. The rationale for using the

Adjusted

EBITDA margin

is that it shows a measure of operating profitability after eliminating events not related to the main

activity of the Group and items from the profit and loss account that are of a non-cash nature.

●

We define

Sales Profit

(previously “Return on sales”) as Gross profit/(loss) from sales, less the user acquisition costs.

The rationale for using

Sales Profit

is to show the profitability of sales in the value aspect after covering costs directly

related to the generated revenue – mainly distribution costs (fees for owners of distribution platforms), server expenses

and the user acquisition costs through paid advertising campaigns.

●

We define

Sales profit margin

(previously “Sales margin”) as the ratio of Sales profit to Revenue. The rationale for using

the sales profit % is to show the profitability of sales as a percentage after covering variable costs directly related to the

revenue generated – mainly distribution costs (fees for owners of distribution platforms), server expenses and the user

acquisition costs through paid advertising campaigns.

●

We define

User Acquisition cost as % of revenue

as the ratio of User acquisition costs to Revenue. The rationale for

using the

User Acquisition cost as % of revenues

is to show how much of our revenue we reinvest directly in

maintaining and expanding our player base.

●

We define

Adjusted net result

as the net result for the year adjusted for events not related to the main activity of the

Group. In the periods presented, i.e. 2023 and 2022 there were share-based payment expenses, provision for litigation,

costs related to strategic options review and impairment of intangible assets. The rationale for using the

Adjusted net

result

is that it constitutes an attempt to show the Net result for the year after eliminating events not related to the main

activity of the Group and items from the profit and loss account that are of a non-cash nature.

●

We define

Adjusted net result margin

as the ratio of the

Adjusted net result

to Revenue. The rationale for using the

Adjusted net result margin

is that it constitutes an attempt to show the Net result for the year in percentage after

eliminating events not related to the main activity of the Group and items from the profit and loss account that are of a

non-cash nature.

●

The measures presented are not comparable to similarly titled measures used by other companies. We encourage you

to review our financial information in its entirety and not to rely on a single financial measure.

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

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27

The following table presents a reconciliation of Sales Margin for the periods presented:

Sales Profit and Sales Profit Margin

in thousand USD

12m`2023

12m`2022

Change, %

Q4 2023

Q4 2022

Change, %

Revenue

283,444

318,622

-11.04%

71,333

77,674

-8.2%

Gross profit/(loss) on sales

200,875

221,736

-9.41%

50,811

54,044

-6.0%

User acquisition marketing campaigns

35,337

73,725

-52.07%

10,422

10,081

3.4%

Sales profit

165,538

148,011

11.84%

40,389

43,963

-8.1%

Sales profit margin %

58.4%

46.5%

11.9pp

56.6%

56.6%

-

The following table presents a reconciliation of Adjusted EBITDA for the periods presented:

Adjusted EBITDA reconciliation

1

Employee benefits costs – share-based plan is a non-cash expense related to the Company’s stock option plan and recognized in accordance

with IFRS 2 Share-based Payment. The following table presents a reconciliation of Adjusted Net Result for the periods presented:

2

Costs related to strategic options review are a one-off non recurring expense. The process was concluded on February 15, 2023 as announced in

the current report CR 4/2023.

Adjusted Net Result

in thousand USD

12m`2023

12m`2022

Change, %

Q4 2023

Q4 2022

Change, %

Net result for the period

82,178

32,008

156.7%

19,416

(854)

-

Employee benefits costs – share-based plan

1

2,855

3,082

-7.4%

1,224

993

23.3%

Provision related to litigations

1,700

-

-

-

-

-

Costs related to strategic options review

2

547

3,438

-84.1%

-

1,433

-

Impairment of intangible assets – Traffic

Puzzle

game

-

26,087

-

-

26,087

-

Adjusted Net Result

87,280

64,615

35.1%

20,640

27,659

-25.4%

Adjusted Net Result %

30.8%

20.3%

10.5pp

28.90%

35.60%

-6.7pp

1

Employee benefits costs – share-based plan is a non-cash expense related to the Company’s stock option plan and recognized in accordance

with IFRS 2 Share-based Payment.

2

Costs related to strategic options review are a one-off non recurring expense. The process was concluded on February 15, 2023 as announced in

the current report CR 4/2023.

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

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28

in thousand USD

12m`2023

12m`2022

Change, %

Q4 2023

Q4 2022

Change, %

Net result for the period

82,178

32,008

156.7%

19,416

-854

-

Income tax

16,587

7,046

135.4%

3,936

608

547.4%

Finance expense

1,150

1,726

-33.4%

646

-242

-366.9%

Finance income

(5,842)

(2,172)

169.0%

(1,366)

(1,279)

6.8%

Depreciation and amortization

9,058

11,080

-18.2%

2,242

2,974

-24.6%

EBITDA

103,131

49,688

107.6%

24,874

1,207

-

EBITDA Margin

36.4%

15.6%

20.8pp

34.9%

1.6%

33.3pp

Employee benefits costs – share-based plan

1

2,855

3,082

-7.4%

1,224

993

23.3%

Provision related to litigations

1,700

-

-

-

-

-

Costs related to strategic options review

2

547

3,438

-84.1%

-

1,433

-

Impairment of intangible assets – Traffic

Puzzle game

-

26,087

-

-

26,087

-

Adjusted EBITDA

108,233

82,295

31.5%

26,098

29,720

-12.2%

Adjusted EBITDA Margin

38.2%

25.8%

12.4pp

36.6%

38.3%

-1.7pp

Revenue

Our revenue consists of revenue generated by in-app purchases in gaming applications and in-app advertising, as shown in the

table below.

in thousand USD

12m`2023

12m`2022

Change, %

Q4 2023

Q4 2022

Change, %

Gaming applications

279,874

308,852

-9.4%

70,470

76,270

-7.6%

Advertising

3,570

9,770

-63.5%

863

1,404

-38.5%

Total revenue

283,444

318,622

-11.0%

71,333

77,674

-8.2%

Total revenue decreased by USD 35,178 thousand, i.e. 11.0%, from USD 318,622 thousand for FY 2022, to USD 283,444

thousand for FY 2023. In Q4 2023, total revenue decreased by USD 6,341 thousand, i.e. 8.2%, compared to Q4 2022, and

remained flat compared to Q3 2023.

Revenue generated by in-app purchases in gaming applications decreased by 9.4% in FY 2023 compared to FY 2022 due to a

decrease in both DAU (daily active users) and DPU (daily paying users) caused by lower marketing spend.

Revenue generated by advertising decreased by 63.5% in FY 2023 compared to FY 2022 mostly due to the declining user base

of Traffic Puzzle and some of previously discontinued games.

Below, we show the revenue split into main product categories:

in thousand USD

12m`2023

12m`2022

Change, %

Q4 2023

Q4 2022

Change, %

Huuuge Casino

180,453

188,656

-4.3%

45,954

47,723

-3.7%

Billionaire Casino

91,783

99,418

-7.7%

23,316

25,153

-7.3%

Total Core Franchises

272,236

288,074

-5.5%

69,270

72,876

-4.9%

Traffic Puzzle

9,262

26,172

-64.6%

1,701

4,059

-58.1%

Other

1,946

4,376

-55.5%

362

739

-51.0%

Total New Franchises

11,208

30,548

-63.3%

2,063

4,798

-57.0%

Total Revenue

283,444

318,622

-11.0%

71,333

77,674

-8.2%

Revenue generated by our core games (i.e., Huuuge Casino and Billionaire Casino) decreased by USD 15,838 thousand, i.e.

5.5%, for FY 2023 compared to FY 2022 and decreased by USD 3,606, i.e. 4.9%, for Q4 2023 compared to the corresponding

quarter of 2022. This decline is attributed to lower marketing spend driving the decline in DAU and DPU.

With regard to Traffic Puzzle, revenue decreased by 16,910 thousand, i.e. 64.6%, between FY 2023 and FY 2022 and by 58.1% in

Q4 2023 compared to the corresponding quarter of 2022. This is a result of sunsetting the Traffic Puzzle studio and putting the

game into maintenance mode, both of which took place at the beginning of FY 2023.

The geographical breakdown of revenue is described in Note 3 to the Consolidated Financial Statements for 2023.

Operating expenses

Operating expenses for the year ended December 31, 2023 decreased by USD 65,693 thousand, i.e. 25.8%, compared to the year

ended December 31, 2022. This change resulted primarily from (i) the decrease in User Acquisition Marketing Campaigns

constituting a dominant part of the Sales and Marketing expenses and (ii) the decrease in cost of sales.

The table below presents a breakdown of our operating expenses.

in thousand USD

12m`2023

12m`2022

Change, %

Q4 2023

Q4 2022

Change, %

Cost of sales

(82,569)

(96,886)

-14.8%

(20,522)

(23,630)

-13.2%

Sales and marketing expenses:

(50,155)

(88,814)

-43.5%

(14,460)

(13,849)

4.4%

thereof User acquisition marketing campaigns

(35,337)

(73,725)

-52.1%

(10,422)

(10,081)

3.4%

thereof General sales and marketing expenses

(14,818)

(15,089)

-1.8%

(4,038)

(3,768)

7.2%

Research and development expenses

(22,008)

(29,577)

-25.6%

(4,533)

(6,450)

-29.7%

General and administrative expenses

(34,463)

(39,611)

-13.0%

(8,887)

(9,749)

-8.8%

Total operating expenses

(189,195)

(254,888)

-25.8%

(48,402)

(53,678)

-9.8%

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29

Cost of sales

Cost of sales for the year ended December 31, 2023 decreased by USD 14,317 thousand from USD 96,886 thousand to USD

82,569 thousand, i.e. by 14.8%, compared to the year ended December 31, 2022 and by USD 3,108 thousand, i.e. 13.2%, in Q4

2023 compared to the corresponding period of 2022. As the cost of sales is mostly driven by commissions to distributors

(platform fees) in Q4 and full 2023, we observe a stronger decrease in cost of sales than the decrease in revenue generated by

in-app purchases mainly due to the expansion of the direct-to-consumer webshop platform for our VIP players with significantly

lower platform processing fees.

Sales and marketing expenses

Sales and marketing expenses for the year ended December 31, 2023 decreased by USD 38,659 thousand from USD 88,814

thousand to USD 50,155 thousand, i.e. by 43.5%, compared to the year ended December 31, 2023. In Q4 2023 sales and

marketing expenses increased slightly by USD 611 thousand, i.e., 4.4%, compared to Q4 2022. Sales and marketing expenses

consist of: i) user acquisition marketing campaigns and ii) general sales and marketing expenses.

The following trends were observed for these items:

User acquisition marketing campaigns

The cost of user acquisition marketing campaigns for the year ended December 31, 2023 decreased by USD 38,388 thousand

from USD 73,725 thousand to USD 35,337 thousand, i.e., by 52.1%, compared to the year ended December 31, 2022.This

reflected primarily our user acquisition strategy discussed in the User Acquisition and post-IDFA mobile advertising market

update section. Measurement of marketing performance has deteriorated significantly with the depreciation of the IDFA. This

has made it more challenging to acquire the right profile of players, thereby negatively affecting our ability to undertake

large-scale user acquisition and maintain existing payback periods. In Q4 2023 the cost of user acquisition marketing

campaigns has increased slightly by USD 341 thousand, i.e., 3.4%, compared to Q4 2022 which follows the improved paybacks

observed in the second half of 2023 achieved by execution of our new UA strategy in the post-IDFA reality.

The chart below presents a quarterly view of our user acquisition marketing campaigns as a percentage of revenue.

Huuuge, Inc.

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General sales and marketing expenses

General sales and marketing expenses for the year ended December 31, 2023 decreased by USD 271 thousand from USD

15,089 thousand to USD 14,818 thousand, i.e. by 1.8%, compared to the year ended December 31, 2022, mainly due to a

decrease in salaries and employee related costs and decrease of employee stock options plan allocated to the sales and

marketing team, offset by the increase of external marketing services. In Q4 2023, general sales and marketing expenses

increased by USD 270 thousand, i.e. 7.2%, from USD 3,768 thousand in Q4 2022 to USD 4,038 thousand, mainly due to increase

of the data hosting expenses, as well as the introduction of new activities such as brand and influencer marketing offset by the

decreased salary and bonuses expenses.

Research and development costs

Research and development costs for the year ended December 31, 2023, decreased by USD 7,569 thousand, from USD 29,577

thousand to USD 22,008 thousand, marking a 25.6% reduction compared to the year ended December 31, 2022. This decrease

was primarily due to reduced salaries and employee stock options for the R&D team, which fell by USD 4,174 thousand and USD

965 thousand, respectively, reflecting a reduction in the team's headcount. Additionally, other research and development costs

decreased by USD 1,900 thousand, largely due to the scale of external R&D support being greater in 2022. In Q4 2023, research

and development costs decreased by USD 1,917 thousand, i.e. 29.7%, compared to Q4 2022. This was mostly due to lower

employee stock option plan expenses, salaries, and other employee-related costs in the last quarter of 2023.

General and administrative expenses

General and administrative expenses for the year ended December 31, 2023, decreased by USD 5,148 thousand, from USD

39,611 thousand to USD 34,463 thousand, marking a 13.0% reduction compared to the year ended December 31, 2022. This

decrease is the result of a combined effect of: (i) a decrease in salaries and employee-related costs by USD 2,043 thousand,

and (ii) a decrease in finance & legal services costs by USD 3,066 thousand. The latter was primarily due to the fact that a

substantial portion of the costs for strategic options reviews was recognized in 2022, as opposed to 2023 (USD 3,438 thousand

and USD 547 thousand, respectively). General and Administrative expenses in Q4 2023 decreased by USD 862 thousand, i.e.

8.8%, compared to the corresponding quarter of 2022, which is primarily attributable to the decrease in finance and legal

services (advisory fees incurred during the strategic options review in 2022).

Profitability

Despite the decrease in revenue, our sales profit increased by USD 17,527 thousand from USD 148,011 thousand

to USD

165,538 thousand, i.e. 11.8%, and the sales profit margin by 11.9pp for the year ended December 31, 2023 compared to the year

ended December 31, 2022. The change results from a significant decrease in “User acquisition marketing campaigns" expenses

as described in the "Operating expenses" section. In Q4 2023 our sales profit decreased by USD 3,574 thousand (i.e. 8.1%)

following largely the revenue trend while the sales profit margin remained flat compared to the corresponding quarter of 2022.

The adjusted EBITDA increased by USD 25,938 thousand and the adjusted EBITDA margin by 12.4pp in the year ended

December 31, 2023, compared to the year ended December 31, 2022. This increase was primarily due to a similar rise in Sales

Profit (as discussed above) and a significant reduction in research and development and general and administrative expenses.

In Q4 2023, the adjusted EBITDA decreased by USD 3,622 thousand, or 12.2%, compared to Q4 2022. This was primarily due to

a decrease in sales profit, partially offset by reductions in research and development and general and administrative expenses

Finance income/(expenses), net

The table below presents a Finance income and Finance expenses for the periods presented:

in thousand USD

12m`2023

12m`2022

Change, %

Q4 2023

Q4 2022

Change, %

Finance income

5,842

2,172

169.0%

1,366

1,279

6.8%

Finance expense

(1,150)

(1,726)

-33.4%

(646)

242

-

Finance expense, net

4,692

446

-

720

1,521

-52.7%

Finance income, net for the year ended December 31, 2023 amounted to USD 4,692 thousand and is mainly attributable to

finance income generated on interests on short-term bank deposits and money market mutual funds investments (USD 5,842

thousand) partially offset by finance expenses amounting to USD 1,150 thousand driven by foreign exchange losses (mainly

Huuuge, Inc.

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31

resulting from weakening trend in the USD/PLN exchange rate in Q4 2023). Finance income, net in Q4 2023 amounted to USD

720 due to income generated from interests on short-term bank deposits offset by weakening trend in the USD/PLN exchange

resulting in foreign exchange losses in the last quarter of 2023.

Statement of financial position

Selected Consolidated Statements of Financial Position

The following selected consolidated financial information as at December 31, 2023 and December 31, 2022 has been derived

from the Consolidated Financial Statements included in this Annual Report.

As at December 31,

As at December 31,

in thousand USD

2023

Structure

2022

Structure

ASSETS

Total non-current assets, including:

29,794

13.7%

37,442

13.1%

Right-of-use asset

6,850

3.2%

12,965

4.5%

Goodwill

2,554

1.2%

2,462

0.9%

Intangible assets

9,854

4.5%

12,057

4.2%

Other items

10,536

4.8%

9,958

3.5%

Total current assets, including:

187,634

86.3%

248,875

86.9%

Trade and other receivables

32,635

15.0%

25,855

9.0%

Cash and cash equivalents

152,110

70.0%

222,245

77.6%

Other items

2,889

1.3%

775

0.3%

Total assets

217,428

100.0%

286,317

100.0%

EQUITY

Total equity

177,060

81.4%

240,727

84.1%

LIABILITIES

Total non-current liabilities, including:

7,217

3.3%

9,976

3.5%

Long-term lease liabilities

6,843

3.1%

9,812

3.4%

Other items

374

0.2%

164

0.1%

Total current liabilities, including:

33,151

15.2%

35,614

12.4%

Trade and other payables

17,132

7.9%

24,302

8.5%

Short-term lease liabilities

3,796

1.7%

4,015

1.4%

Provisions

1,700

0.8%

-

0.0%

Other items

10,523

4.8%

7,297

2.5%

Total liabilities

40,368

18.6%

45,590

15.9%

Total equity and liabilities

217,428

100.0%

286,317

100.0%

Assets

Total assets decreased by USD 68,889 thousand (i.e. 24.1% from USD 286,317 thousand as at December 31, 2022 to USD

217,428 thousand as at December 31, 2023). The YoY change in total assets mainly reflects the net decrease in cash and cash

equivalents. As a result, we observe a decrease in share of current assets in total assets by 0.6pp, from 86.9% to 86.3% as at

December 31, 2023. The structure of other assets lines remained mostly unchanged.

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Liabilities

Total liabilities decreased by USD 5,222 thousand, i.e. 11.5%, from USD 45,590 thousand as at December 31, 2022 to USD

40,368 thousand as at December 31, 2023. As at December 31, 2023, total liabilities mainly comprised (i) trade and other

payables (accounting for 42.4% of total liabilities compared to 53.3% as at December 31, 2022) and (ii) long-term lease

liabilities (accounting for 16.9% of total liabilities compared to 21.5% as at December 31, 2022).

Cash flows and liquidity

Selected consolidated statements of cash flows

The following table summarizes selected net cash flows from operating, investing and financing activities for the two periods of

twelve months ended December 31, 2023 and December 31, 2022 and for Q4 2023 compared to Q4 2022.

in thousand USD

12m`2023

12m`2022

Change, %

Q4 2023

Q4 2022

Change, %

Cash flows from operating activities

Profit/(loss) before tax

98,765

39,054

152.9%

23,352

(246)

-

Adjustments for:

Total of non-cash changes in

depreciation,amortization,

profits or losses on disposal

9,748

11,147

-12.6%

2,347

2,994

-21.6%

Non-cash employee benefits expense - share-based

payments

2,855

3,082

-7.4%

1,224

993

23.3%

Finance (income)/cost - net

(2,303)

(4,558)

-49.5%

1,054

(568)

-

Changes in net working capital

(15,155)

2,298

-

(1,817)

888

-

Provisions

1,700

(54)

-

-

-

-

Impairment of intangible assets

-

26,087

-

-

26,087

-

Other items

289

101

186.1%

16

169

-90.5%

Cash flows from operating activities

95,899

77,157

24.3%

26,176

30,317

-13.7%

Income tax paid

(13,479)

(6,200)

117.4%

(1,371)

(1,436)

-4.5%

Net cash flows from operating activities

82,420

70,957

16.2%

24,805

28,881

-14.1%

Cash flows from investing activities, including:

Acquisition of property, plant and equipment and

intangible assets

(2,819)

(4,501)

-37.4%

(612)

(1,497)

-59.1%

Interest received

6,144

1,346

356.5%

1,277

928

37.6%

Sublease repayment & interest received from

sublease

798

-

-

281

-

-

Acquisition of IP rights

-

(29,400)

-

-

-

-

Net cash from investing activities

4,123

(32,555)

-

946

(569)

-

Cash flows from financing activities, including:

Repurchase of own shares incl. transaction costs

(150,985)

(20,090)

651.5%

-

-

-

Lease repayment & interest paid

(4,506)

(4,297)

4.9%

(1,143)

(922)

24.0%

Exercise of stock options

470

2,540

-81.5%

54

127

-57.5%

Net cash from financing activities

(155,021)

(21,847)

609.6%

(1,089)

(795)

37.0%

Net increase/(decrease) in cash and cash

equivalents

(68,478)

16,555

-

24,662

27,517

-10.4%

Cash and cash equivalents at the end of the period

152,110

222,245

31.6%

152,110

222,245

31.6%

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Net cash flows from operating activities

Net cash inflows from operating activities amounted to USD 82,420 thousand for the year ended December 31, 2023 and USD

24,805 thousand for Q4 2023, which is mainly the result of generated adjusted EBITDA (USD 108,233 thousand and USD 26,098

thousand, respectively), changes in the working capital (USD 15,155 thousand and USD 1,817 thousand, respectively) and

income tax paid (USD 13,479 thousand and USD 1,371 thousand, respectively).

Net cash flows from investing activities

Net cash flows from investing activities for the year ended December 31, 2023 amounted to USD 4,123 thousand and resulted

mainly from interest received on short-term bank deposits and money-market mutual funds in the amount of USD 6,144

thousand, offset by expenditures on software and equipment.

Net cash flows from financing activities

Net cash outflows from financing activities for the year ended December 31, 2023 amounted to USD 155,021 thousand and

resulted mainly from the executed Share Buyback Program (“SBB") in the amount of USD 150,001 thousand (the SBB was

started on May 30, 2023 and ended July 4, 2023).

Credits and loans

There are no significant sureties, loans or guarantees granted or received by the Issuer in the reported financial year.

The Group has no borrowing requirements. The Group anticipates that current sources of financing, i.e. equity and operating

revenues will remain its main sources of financing in the near future. The Group’s operations are not financed using debt

financing.

No sureties and guarantees were granted or received by the Group in the year ended December 31, 2023, including those

granted to the Company’s related entities.

Current and projected financial situation

The table below presents the key parameters for assessing the Group’s profitability, efficiency and liquidity.

in thousand USD

12m' 2023

12m' 2022

Change, %

Q4 2023

Q4 2022

Change, %

Profitability ratios

Gross Profit margin

70.9%

69.6%

1.3pp

71.2%

69.6%

1.6pp

Adjusted EBITDA margin

38.2%

25.8%

12.4pp

36.6%

38.3%

-1.7pp

EBITDA margin

36.4%

15.6%

20.8pp

34.9%

1.6%

33.3pp

Adjusted Net Result margin

30.8%

20.3%

10.5pp

28.9%

35.6%

-6.7pp

Efficiency ratios

Debtors days

37.7

30.7

22.7%

Creditors days

40.0

55.1

-27.5%

Liquidity ratio

Current ratio

5.7

7.0

-19.0%

Formulas for the calculation of indicators:

Gross Profit margin

: Gross profit/(loss) on sales / Revenue

Adjusted EBITDA margin:

Adjusted EBITDA / Revenue

EBITDA margin:

EBITDA / Revenue

Adjusted Net Result margin:

Adjusted Net Result / Revenue

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Debtors days:

(Trade and other receivables, gross, at the beginning of the period + Trade and other receivables, gross, at the

end of the period) /2) / (Revenue / no. of days)

Creditors days:

(Trade and other payables, gross, at the beginning of the period + Trade and other payables, gross, at the end of

the period) /2) / (Operating expenses / no. of days)

Current ratio:

Total current assets / Total current liabilities

The Group is in very good financial condition, with a high level of net cash (USD 141,471 thousand).

Because the Group (including the Parent Company) did not use external financing in 2022–2023, no debt ratios will be

presented.

Separate results of operations

Separate results of operations

Year

ended

December

31, 2023

Year

ended

December

31, 2022

Change

Change, %

3-month

period

ended

December

31, 2023

3-month

period

ended

December

31, 2022

Change

Change,

%

Revenue

1,577

2,922

(1,345)

-46%

281

801

(520)

-65%

Gross profit / (loss)

1,577

2,922

(1,345)

-46%

281

801

(520)

-65%

Sales and Marketing expenses

(56)

(76)

20

-26%

-

(39)

-

-

Research and development

expenses

(419)

(2,156)

1,737

-81%

-

(534)

-

-

General and administrative

expenses

(6,015)

(8,167)

2,152

-26%

(1,376)

(2,039)

663

-33%

Dividend income

159,729

-

159,729

-

30,757

-

30,757

-

Other operating

income/(expense), net

(1,876)

(16)

(1,860)

-

(132)

(2)

(130)

-

Operating result

152,940

(7,493)

-

-

29,530

(1,813)

-

-

Finance income

2,869

986

1,883

191%

730

584

146

25%

Finance expense

-

(376)

376

-

-

(48)

48

-

Profit/(loss) before tax

155,809

(6,883)

-

30,260

(1,277)

-

-

Income tax

(1,558)

(829)

(729)

88%

591

(238)

-

-

Net result for the year

154,251

(7,712)

-

-

30,851

(1,515)

-

-

Total other comprehensive

income

154,251

(7,712)

-

-

30,851

(1,515)

-

-

The Company's separate net result for the year ended December 31, 2023 increased from negative 7,712 thousand for the year

ended December 31, 2022 to positive USD 154,251 thousand as a result of increase in operating result mainly due to the

intragroup dividend income generated in FY 2023.

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Selected separate statements of financial position

As at December 31,

As at December 31,

2023

Structure

2022

Structure

Assets

Total non-current assets, including

29,935

24.3%

29,446

25.2%

Investment in subsidiaries

29,847

24.2%

29,162

24.9%

Other items

88

0.1%

284

0.2%

Total current assets, including

93,245

75.7%

87,440

74.8%

Dividend receivable

10,000

8.1%

0

0.0%

Trade and other receivables

1,961

1.6%

1,224

1.0%

Cash and cash equivalents

80,532

65.4%

86,210

73.8%

Other items

752

0.6%

6

0.0%

Total assets

123,180

100.0%

116,886

100.0%

Total equity

119,186

96.8%

112,688

96.4%

Total liabilities

3,994

3.2%

4,198

3.6%

Total current liabilities, including

3,994

3.2%

4,198

3.6%

Trade and other payables

2,294

1.9%

4,092

3.5%

Provisions

1,700

1.4%

0

-

Other items

-

-

106

0.1%

Total equity and liabilities

123,180

100.0%

116,886

100.0%

Assets

Total assets increased by USD 6,294 thousand, i.e. 5.4%, from USD 116,886 thousand as at December 31, 2022 to USD 123,180

thousand as at December 31, 2023, mainly due to the intragroup dividend receivable not yet paid as at December 31, 2023.

As of December 31, 2023, and December 31, 2022, total assets primarily consisted of the following items: i) cash and cash

equivalents (accounting for 65.4% and 73.8% of total assets as of December 31, 2023, and December 31, 2022, respectively); ii)

investments in subsidiaries (accounting for 24.2% and 24.9% of total assets as of December 31, 2023, and December 31, 2022,

respectively); and iii) dividend receivable (accounting for 8.1% of total assets as of December 31, 2023)

Liabilities

Total liabilities decreased by USD 204 thousand, i.e. 4.9%, from USD 4,198 thousand as at December 31, 2022, to USD 3,994

thousand as at December 31, 2023, which is attributable to the decrease in payables related to strategic options review costs,

offset by the recognition of provision for litigations which amounted to USD 1,700 thousand as at December 31, 2023.

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Selected separate statements of cash flows

The following table summarizes selected net cash flows from operating, investing and financing activities for the two periods of

twelve months ended December 31, 2023 and December 31, 2022.

12m`2023

12m`2022

Change

Change, %

Cash flows from operating activities

Profit/(loss) before tax

155,809

(6,883)

162,692

-

Adjustments for:

Non-cash employee benefits expense - share-based payments

2,170

774

1,396

180%

Finance (income)/expense, net

(2,805)

(1,051)

(1,754)

167%

Changes in net working capital:

(2,628)

4,080

(6,708)

-

Dividend receivable

(10,000)

-

(10,000)

-

Provisions

1,700

-

1,700

-

Other items

172

103

69

67%

Cash flows from operating activities

144,418

(2,977)

147,395

-

Income tax paid

(2,326)

(545)

(1,781)

327%

Net cash from operating activities

142,092

(3,522)

145,614

-

Cash flows from investing activities

Interest received

2,915

590

2,325

394%

Other items

-

(21)

21

-

Net cash from investing activities

2,915

569

2,346

412%

Cash flows from financing activities

Repurchase of common shares under Share Buyback Scheme

("SBB") incl. Transaction costs

(150,985)

(20,090)

(130,895)

652%

Exercise of stock options

470

2,540

(2,070)

-81%

Other items

(60)

(78)

18

-23%

Net cash from financing activities

(150,575)

(17,628)

(132,947)

754%

Net increase/(decrease) in cash and cash equivalents

(5,568)

(20,581)

15,013

-73%

Effect of exchange rate fluctuations and accrued interest

(110)

461

(571)

-

Cash and cash equivalents at the beginning of the period

86,210

106,330

(20,120)

-19%

Cash and cash equivalents at the end of the period

80,532

86,210

(5,678)

-7%

Cash flows from operating activities

Net cash outflows from operating activities for the year ended December 31, 2023 amounted to USD 142,092, which is a main

effect of the positive net result in FY 2023 (USD 154,251 thousand) discussed in the separate results of operations section.

Cash flows from investing activities

Net cash inflows from investing activities for the year ended December 31, 2023 amounted to USD 2,915 thousand and it is

mostly attributable to interests earned on cash deposits and money market mutual funds.

Cash flows from financing activities

For the twelve months ended December 31, 2023, the Company recorded net cash outflows from financing activities amounting

to USD 150,575 thousand, mainly due to the executed Share Buyback in May-July 2023.

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Additional information

Assessment of the possibility of realizing the investment plans

The Company has a high level of cash and cash equivalents as at December 31, 2023. Therefore the Group is fully capable of

developing the existing product portfolio, creating new games and financing any new initiatives. The Company is interested in

acquiring other entities operating on the F2P games market and is capable of obtaining additional financing if there is such a

need.

Information on key markets and dependence on customers and suppliers

Information on key markets and on dependence on customers and suppliers is described in Note 3 of the Consolidated

Financial Statements for 2023.

Significant events after the balance sheet date

Significant events that occurred after the balance sheet date are presented in the Consolidated Financial Statement for the

period in Note 23 Subsequent events.

Possibility of accomplishing previously published forecasts

The Issuer does not publish financial forecasts.

Financial risk management

The financial risk management section is described in Note 7 to the Consolidated Financial Statements.

Off balance sheet positions

There were no off balance sheet positions as of December 31, 2023.

Structure of the main capital investments or major capital expenditures

There were no main capital investments or major capital expenditures as of December 31, 2023.

Climate

The Company’s Executive Management has strategic oversight of relevant sustainability issues. A materiality study was

conducted in 2022 to assess, from a double materiality perspective, which ESG issues are material to the group. Among the

material issues identified were issues related to combating climate change. At the same time, the study did not identify any

significant risks related to climate change.

Huuuge Inc.'s business model is characterized by low environmental impact. The group does not use fuels in buildings and

trace amounts in vehicles used by the company, resulting in negligible greenhouse gas emissions in scope 1 (direct emissions

resulting mainly from use of fuels). Electricity is used in office applications, and the group does not have its own extensive data

centers, also resulting in low greenhouse gas emissions in scope 2 (indirect emissions resulting from production of energy

acquired by the company). A greenhouse gas emissions calculation in scope 3 (all other indirect emissions in the company’s

value chain) is planned for the future.

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GOVERNANCE

Shares and shareholding structure

Common and preferred stock

Basic information about the stock

Name

Huuuge, Inc.

Short name

HUUUGE

WSE Ticker

Bloomberg Ticker

Reuters Ticker

HUG

HUG PW

HUGP.WA

ISIN

US44853H1086

Number of issued stock

67,124,778

Effective on February 5, 2021, all Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares were

converted into Common Shares. On February 5, 2021, the Company also adopted the Fourth Amended and Restated Certificate

of Incorporation, pursuant to which the Company has the authority to issue 113,881,420 shares, which shall be divided into two

classes, consisting of (i) 113,881,418 Common Shares of USD 0.00002 par value per share and (ii) two Preferred Shares of USD

0.00002 par value per share, which shall be divided into two series, consisting of one Series A Preferred Share of USD 0.00002

par value and one Series B Preferred Share of USD 0.00002 par value. Within the authorization in the Certificate of

Incorporation, the Board of Directors is authorized to make decisions about issuing and redeeming Company’s Common

Shares. The Company issued two Preferred Shares: one Series A Preferred Share to RPII HGE LLC and one Series B Preferred

Share to Big Bets OÜ (controlled by Anton Gauffin). The Preferred Shares, respectively, give RPII HGE LLC the right to appoint

one director of the Company and Big Bets OÜ the right to appoint two directors of the Company, provided that one such director,

to be approved, will be Anton Gauffin. Preferred Shares carry the same voting rights as Common Shares unless otherwise

stipulated in the Certificate of Incorporation of the Bylaws, but they are not admitted to trading on the Warsaw Stock Exchange

(the “WSE”).

The Series A Preferred Share is subject to automatic conversion in case the holders of Series A Preferred Shares (i) ceasing to

own, together with its affiliates, as least 50% of the aggregate number of Series A Preferred Shares and Common Shares owned

by such holders upon the opening of the first day of listing of the Common Shares on the regulated market operated by the

Warsaw Stock Exchange or (ii) transferring all f Series A Preferred Shares. The Series B Preferred Share is subject to automatic

conversion in case the holders of Series B Preferred Shares (i) ceasing to own, together with its affiliates, as least 10% of the

aggregate number of Series B Preferred Shares and Common Shares owned by such holders upon the opening of the first day

of listing of the Common Shares on the regulated market operated by the Warsaw Stock Exchange or (ii) transferring all shares

of Preferred Stock of Series B Preferred Shares.

The Certificate of Incorporation and Bylaws do not implement any voting limitations as to the performance of voting rights by

holders of any amount of Shares.

On January 27, 2021, Huuuge, Inc. published its prospectus and launched its initial public offering. The offering comprised a

public subscription for 11,300,100 newly issued shares of the Company and a public sale of 22,016,586 existing shares, and

also seeking the admission and introduction of 84,246,695 Common Shares including 11,300,100 newly issued Common

Shares to trading on the regulated market of the Warsaw Stock Exchange with a nominal value of USD 0.00002 per share. The

first listing date on the Warsaw Stock Exchange was February 19, 2021.

On August 29, 2023, in accordance with Section 243 of the Delaware General Corporation law, the Board of Directors adopted a

resolution on the retirement of 17,121,919 shares of common stock of the Company representing 20.3% of the issued share

capital of the Company comprising of 84,246,697 shares at the time. The shares that were subject to the retirement were

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purchased by the Company during the share buyback (described below) with the intention for the shares to be retired, with the

exception to the shares necessary, in the Company’s view, to satisfy its ongoing needs under the Company’s employee stock

option plans. Effective as of the adoption of the resolution of the Board of Directors, i.e. August 29, 2023, the retired shares

resumed the status of authorized and unissued shares of the common stock of the Company and the Issuer’s issued share

capital decreased from 84,246,697 to 67,124,778 shares.

Further, following a review, the Board of Directors concluded that such a high authorized capital is not necessary and therefore the

Board of Directors decided that it will recommend that at the next Annual General Meeting the shareholders approve an

amendment to the Certificate of Incorporation of the Company to decrease the authorized capital of the Issuer by 21,128,984

shares of common stock of the Company. The proposal of the Board of Directors has not received a required majority of votes at

Annual General Meeting of the Company held on October 27, 2023, and the authorized share capital remained unchanged at

113,881,420.

The Company’s issued share capital as of date of this Annual Report and approval of this Annual Report for publication

consisted of: (i)

67,124,776

Common Shares with a nominal value of USD 0.00002 each, and two Preferred Shares (Preferred

Shares are not admitted to trading on the WSE).

To the best of the Company’s knowledge, as at the date of publication of this Report, the shareholders holding (directly or

indirectly through subsidiaries) at least 5% of the total number of votes at the Issuer’s general meeting are presented in the

table below.

Shareholder

Shares

% of share capital

Votes

% of votes

at the General Meeting

Anton Gauffin (through Big Bets OÜ)

1

20,394,509

30.38

20,394,509

32.34

Raine Group (through RPII HGE LLC)

1

8,571,525

12.77

8,571,525

13.59

Nationale-Nederlanden FUNDS

5,688,696

8.47

5,688,696

9.02

Treasury Shares (carry no voting

rights)

4,069,428

6.06

-

-

Others

28,400,620

42.31

28,400,620

45.04

Total

2

67,124,778

100.00

63,055,350

100.00

1

including one Preferred Share;

2

67,124,776 Common Shares are introduced to public trading on the Warsaw Stock Exchange as of the date of approval of this

Annual Report for publication. Moreover, two shares of the Company are Preferred Shares and have not been introduced to

public trading.

Each holder of Common Shares, as such, and each holder of Preferred Shares, are entitled to one vote for each Common Share

or Preferred Share, respectively. There are no restrictions on the exercise of voting rights. Unless otherwise expressly required

by law or stipulated in the Certificate of Incorporation, the holders of Common Shares and Preferred Shares vote together as a

single class on all matters submitted to a shareholder vote. The Certificate of Incorporation and the Bylaws do not stipulate any

restrictions on the transfer of ownership of the Company’s securities.

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Share Buyback

As reported in the current report no. 25/2023 dated July 4, 2023, as a result of the settlement of the acquisition and transfer of

ownership of the shares offered in response to a time-limited invitation to submit to the Company sale offers relating to shares

in the Company, at a pre-determined and fixed price per share, open to all shareholders of the Company (the "Invitation") (the

"SBB") announced by the Company on May 30, 2023 in the current report no. 19/2023 (as subsequently amended and

announced by the Company in current report no. 23/2023 on June 19, 2023), the Company acquired 17,121,919 of its common

shares that represented at the time 20.32% of the share capital of the Company and that entitled their holders to exercise at the

time 21.42% of the total number of votes at the general meeting of the Company for a total consideration of USD 149,999,996.

The settlement of the SBB took place on July 4, 2023 (the "Settlement Date") outside the organized system of trading in

financial instruments through IPOPEMA Securities S.A. The acquisition was made at a gross price of USD 8.7607 per share.

Amounts due to investors, after withholding of applicable taxes, have been converted from USD to PLN in accordance with the

interbank exchange rate applicable as at July 3, 2023 (as the day preceding the Settlement Date), which was 4.0735.

The shares were acquired on the basis of the Company's Board of Directors resolution dated May 30, 2023 launching the

acquisition of the Company's common shares listed on the Warsaw Stock Exchange by way of a time-limited Invitation to Sell,

establishing detailed conditions and procedures for participation in and execution of the SBB.

Treasury Shares

As at December 31, 2022, the Company held 5,063,182 Treasury Shares.

As described above, the Company acquired 17,121,919 common shares in the SBB and all the acquired shares were retired on

August 29, 2023 in accordance with Section 243 of the Delaware General Corporation law.

Over the course of 2023, a total of 915,554 of the Company’s Treasury Shares were allocated for the exercise of employee stock

options and delivered.

Accordingly, as of December 31, 2023,

the number of Treasury Shares held by the Company amounted to 4,147,628 with total

par value of USD 82.95 and representing 6.18% of the share capital of the Company issued at the time.

On February 7, 2024, the Company’s Board of Directors approved allocation of up to 78,200 Treasury Shares for the exercise of

employee stock options (all were exercised and delivered by the date of approval of this Annual Report for publication).

As of the date of approval of this Annual Report for publication, the number of Treasury Shares held by the Issuer amounted to

4,069,428 with total par value of USD 81.39 and representing 6.06% of the share capital of the Company.

For more detailed information regarding share capital please see Note 12 Share Capital in the Annual Consolidated Financial

Statements.

Share option plans

As at December 31, 2023 the Company had two equity-settled share option programs. The first share option program (the

employee share option plan) was established by our Board of Directors on April 3, 2015 and the second on October 19, 2019.

(Both plans have been further developed and amended by the Board, within its powers under the Company’s governing

documents and the terms of the respective plans). The programs entitle Company officers, employees and some consultants of

the Company and its Subsidiaries to purchase shares in the Company at a specified price. Each option gives the right to acquire

one Common Share in the Company.

The vesting condition of both 2015 Stock Option Plan and 2019 Stock Option Plan programs is to provide the service

continuously for at least 4 years from the grant date. Generally, the prevailing vesting schedule applicable to grants under both

programs stipulates that either:

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- the first 25% of options vest following 12 months of continuous service beginning on the vesting commencement date.

Subsequently, 1/36 of the remaining options vest and become exercisable for each consecutive month of continuous service, or

- 1/48th of the total option shares vest and become exercisable for each consecutive month of continuous service.

The Company has introduced performance conditions to the options granted under 2019 Stock Option Plan to the senior

management of the Company in 2023 that condition exercising the options on reaching specific financial metrics and price of

the Company’s common shares at the Warsaw Stock Exchange.

For further details of the programs, please refer to Note 16 Share-based payment arrangements in the Consolidated Financial

Statements. The Company’s equity-settled share option programs are managed, approved and supervised by the Board of

Directors.

Dividend policy

The Company has no dividend policy. The Board of Directors may from time to time declare dividends out of the Company’s

surplus cash flows and may, subject to the provisions of the Bylaws and the Certificate of Incorporation, set dates for the

declaration and payment thereof. No dividend is payable other than in accordance with the applicable provisions of Delaware

law. The General Meeting does not adopt resolutions regarding the distribution of profits and the payment of dividends.

The Board of Directors has not made any decision regarding the payment of dividends or the value thereof, if any, during the

reporting period.

Our Board of Directors may decide not to pay dividends in the future. This might happen especially if unexpected events occur

that would change the view of the Board of Directors as to the prudent level of cash and capital conservation as well as the

Company’s financial goals and strategy.

Pursuant to the Certificate of Incorporation, all common shares are treated equally, identically and ratably, on a per-share basis,

with respect to any dividends or distributions as may be declared and paid from time to time by the Board of Directors out of

any of the Company’s legally available assets.

General Meetings

Convening a General Meeting

Pursuant to the Bylaws, the date and time of a General Meeting are determined by the Board of Directors, for the purpose of

electing directors and for transaction of other business. The Chairman of the Board or the Chief Executive Officer may call a

Special General Meeting at the written request of the Company’s shareholders owning shares representing at least 10% of the

voting rights.

Upon the request to convene such a meeting, the Board of Directors determines the date, time and place, if any, of such

meeting, which must be scheduled not less than thirty (30) days and not more than ninety (90) days after the Secretary receives

the said request. The Secretary prepares the relevant notification. No business may be discussed at a Special General Meeting

other than that specified in the notice to the shareholders.

An Special General Meeting may only discuss such business as has been included on the agenda by the Board of Directors,

Chairman of the Board, the Chief Executive Officer or the President, or included in the notice sent out at the shareholders’

written request as described above.

Notice of a General Meeting

Pursuant to the Bylaws, whenever shareholders are required or permitted to take any action at a meeting, a timely notice will be

mailed or transmitted electronically by the Secretary to each shareholder of record entitled to vote in accordance with the

records as at the record date for the meeting. Unless otherwise stipulated by the Certificate of Incorporation or the applicable

laws, notice of a meeting should be given not less than ten (10) or more than sixty (60) days before the date of the meeting to

each shareholder entitled to vote at such meeting.

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In addition, notices of all General Meetings, either Annual General Meeting and Special General Meeting, are published in a

current report in accordance with relevant reporting requirements applicable to a company listed on the WSE and on our

Investor Relations website at ir.huuugegames.com, indicating, among others, a record date and all information relevant for

participation and voting at such General Meeting not later than on such record date.

Quorum

Pursuant to the Bylaws, unless otherwise stipulated by law or by the Certificate of Incorporation, at all general meetings (annual

or special), a quorum requires the presence, either in person or by proxy, of holders of at least one-third of the voting rights

associated with the issued and outstanding shares entitled to vote. The majority of the votes cast is decisive for passing or

rejecting a resolution.

Voting and proxies

As at the date of this Annual Report, the Company’s outstanding share capital consists of:

67,124,776

Common Shares and two

Preferred Shares. Each Common Share and each Preferred Share carries one vote. Unless otherwise expressly required by law

or stipulated in the Certificate of Incorporation, both the holders of Common Shares and of Preferred Shares shall vote together

as a single class on all matters submitted to a shareholders’ vote.

Powers of the General Meeting

The General Meeting has the power to elect directors (other than those directors elected by the holders of the Preferred Shares,

and notwithstanding the Board of Directors’ power to fill vacancies in the Board of Directors).

Pursuant to the Certificate of Incorporation, any amendment, alteration, or repeal of the provisions in the Certificate of

Incorporation or Bylaws concerning: (a) the right of the holders of 10% of the total votes to request convening a SGM, (b) the

quorum required at a General Meeting, (c) the number of Directors, their term of office, appointment and dismissal, and

independence criteria, and (d) the Audit Committee (except for any amendment required under the applicable law), shall in each

case be approved by an affirmative vote of the holders of the majority of the outstanding shares carrying voting rights.

Board of Directors

Appointment of the Board of Directors

The Board of Directors consists of five (5) Directors, of which: (i) one (1) director (the “

Series A Director

”) is elected by holders

of the majority of outstanding Series A Preferred Shares carrying voting rights by submitting to the Board of Directors written

consent signed by holders of the majority of the Series A Preferred Shares, (ii) two (2) Directors (the “

Series B Directors

”), are

elected by the holders of the majority of outstanding Series B Preferred Shares entitled to vote at such a meeting by providing

the Board of Directors with written consent signed by holders of the majority of the Series B Preferred Shares, provided that one

such Series B Director, to be qualified, shall be Anton Gauffin, and (iii) the remaining Directors are elected by the holders of

Common Shares. At least two out of the five persons must meet the independence criteria adopted or accepted by the WSE,

including the criteria referred to in Annex II to the European Commission recommendation of February 15, 2005, on the role of

non-executive or supervisory directors of listed companies and on the committees of the (supervisory) board.

In accordance with the Certificate of Incorporation, any Director elected, as stipulated above, by holders of Series A Preferred

Shares or Series B Preferred Shares may be removed without cause, exclusively by an affirmative vote of the holders of the

majority of the outstanding Series A Preferred Shares or Series B Preferred Shares respectively, acting as a separate class,

either at an Special General Meeting duly called for that purpose or pursuant to the written consent of such shareholders. In

addition, in accordance with the applicable law, any director so elected may be removed with cause by the majority of holders of

shares carrying the respective voting rights. The Series A Director or Series B Director(s) may not be appointed by shareholders

of the Company other than by holders of Series A Preferred Shares or Series B Preferred Shares respectively. Any director (other

than a Series A Director or Series B Director) may be removed at any time without cause by an affirmative vote of the holders of

the majority of outstanding Common Shares entitled to vote thereon, voting together as a single class. In addition, in

accordance with the applicable law, any director (other than a Series A Director or Series B Director) may be removed with

cause by the majority in votes cast by the holders of shares carrying the respective voting rights.

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In accordance with the Bylaws, subject to the provisions of the Delaware General Corporation Law and the restrictions

contained in the Certificate of Incorporation or the Bylaws themselves, relating to an act requiring the approval of the

shareholders or the votes of the outstanding shares, the business and affairs of the Corporation are managed and all corporate

powers are exercised by the Board of Directors or a designated entity under its direction. The Board of Directors decides on the

issuance or repurchase of shares within the authorization given in the Certificate of Incorporation.

The Board of Directors currently consists of five (5) persons elected at the Annual General Meeting dated October 27, 2023, for

a term of office ending on the date of the following Annual General Meeting or on the date of election of a replacement director

or on a director’s earlier resignation or dismissal.

The following table summarizes the most important information about acting members of the Board of Directors as at the date

of this Annual Report.

Name

Function

Year of appointment for the

current term of office

Year of expiry of the term of

office

Anton Gauffin

Executive Chairman of the

Board & Executive Director

2023

2024

Henric Suuronen

Non-executive Director

2023

2024

John Salter

Non-executive Director

2023

2024

Krzysztof Kaczmarczyk

Non-executive Director

(independent)

2023

2024

Tom Jacobsson

Non-executive Director

(independent)

2023

2024

Until October 27, 2023, the Board of Directors consisted of the following members:

Rod Cousens, Anton Gauffin, Tom

Jacobsson, Krzysztof Kaczmarczyk, John Salter and Henric Suuronen

.

At the Company’s AGM held on

October 27, 2023, the

holder of the single Company’s Preferred Series A Share elected John Salter for an additional term of office, the holder of the

single Company’s Preferred Series B Share elected Anton Gauffin and Henric Suuronen for an additional term of office, and the

holders of the Company’s Common Shares elected Krzysztof Kaczmarczyk and Tom Jacobsson, each to serve as directors until

the next AGM or until such directors’ successors are duly elected and unless any of the directors dies, resigns, is dismissed or

retires earlier.

Two members of the Company’s Board of Directors,

Krzysztof Kaczmarczyk and Tom Jacobsson,

meet the statutory criteria for

independence in accordance with

the criteria referred to in Annex II to the European Commission recommendation of February

15, 2005, on the role of non-executive or supervisory directors of listed companies and on the committees of the (supervisory)

board

.

The Board of Directors supervises the preparation of the Group’s consolidated financial statements and is required to ensure

that the Group’s consolidated financial statements and the business statements comply with legal requirements. The Chief

Executive Officer approves and signs the Group’s consolidated financial statements. Substantially the same procedures apply to

the Company’s separate financial statements.

Committees

The Board of Directors has established the following committees: the Audit Committee, the Remuneration and Nomination

Committee and the Special Committee.

Audit Committee

The Board of Directors has appointed from among its members the following persons to the Audit Committee:

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●

Mr Krzysztof Kaczmarczyk (Chairman of the Audit Committee);

●

Mr Tom Jacobsson; and

●

Mr John Salter.

Krzysztof Kaczmarczyk is the member of the Audit Committee with knowledge and skills in accounting and finance, and Tom

Jacobsson is the member of the Audit Committee with knowledge and skills in the industry in which the Company operates.

The Audit Committee is responsible for supervising the Company’s financial matters and monitoring the implementation and

maintenance of internal control, risk management, compliance and internal audit systems in the Company. Its scope of activity

includes advising and consulting on financial reporting and auditing financial statements by a statutory auditor, which

constitute actions in the competences of the Board of Directors.

Tom Jacobsson Non-executive director, independent

Tom Jacobsson is a veteran digital business entrepreneur with over 25 years of experience in helping products and businesses

succeed through winning culture, design thinking, lean start-up philosophy and agile development. In previous roles, Tom built

global infrastructure products and mobile technology as 3G System Program Manager for Nokia, ran Nokia's mobile chipset

strategy and planning from single source vendor to multi-source, acted as a turnaround CEO for small and midsize digital

companies and worked with companies on public listings. Presently, he is the CEO of Dunning, Kruger & Associates, a full-stack

digital product company which he co-founded in 2017 and which merged to the North Alliance family in 2021.

Krzysztof Kaczmarczyk, Non-executive director, independent

Krzysztof Kaczmarczyk is an independent member of supervisory boards of companies listed on the Warsaw Stock Exchange.

He has gained over 15 years of supervisory experience sitting on the supervisory boards of more than 40 companies.

Simultaneously, he served as a member or chairman of audit committees of more than 20 companies listed on the WSE. In

1999–2008, he worked for Deutsche Bank in Poland, where he served as Deputy Director of the Stock Market Analysis

Department and Stock Market Analyst for the Central and Eastern European Region. From 2008 to 2010, he held various

management positions within the TP Group (Orange). In 2010–2011, he worked for the Swiss investment bank Credit Suisse in

Poland. In 2012–2015, he held the position of vice-president of the Management Board for Strategy and Business Development

in Emitel, a leading terrestrial radio and television network operator in Poland. From 2016 to 2019, he worked as a strategy

advisor to the Management Board of KGHM Polska Miedź S.A. (a leading mining company in the world). From 2021, he holds

the position of president of the Management Board of Mabion S.A., a biotechnology company (listed on the Warsaw Stock

Exchange). He is a graduate of the Warsaw School of Economics with a degree in finance and accounting.

In 2023, the Audit Committee of the Board of Directors held five (5) meetings.

Remuneration and Nomination Committee

The Board of Directors has appointed from among its members the following persons to the Remuneration and Nomination

Committee:

●

Mr Krzysztof

Kaczmarczyk (Chairman of the Remuneration and Nomination and Remuneration Committee)

●

Mr Tom Jacobsson

●

Mr John Salter

The tasks of the Remuneration and Nomination Committee consist of (a) preparing and periodically reviewing the Group’s

compensation policy and principles, the performance criteria related to compensation and a periodical review of their

implementation, as well as submitting proposals and recommendations to the Board of Directors, and (b) preparing all relevant

decisions of the Board of Directors concerning the nomination of members of the Issuer’s Board of Directors, as well as

submitting proposals and recommendations to the Board of Directors.

Special Committee

On June 14, 2022, the Board of Directors established the Special Committee and appointed from among its members the

following persons to the committee:

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●

Mr Krzysztof

Kaczmarczyk

●

Mr Tom Jacobsson

●

Mr John Salter

The

Special

Committee

received

a

mandate

from

the

board

to

manage

the

strategic

options

review

and

make

recommendations to the board regarding steps to be taken pursuant to the review. The strategic option review process ended

on February 15, 2023 and the Special Committee was then dissolved on August 29, 2023.

Agreements with the Board of Directors

Except for the transactions mentioned below, remuneration for the year ended December 31, 2023 of the members of the Board

of Directors and share options owned by members of the Board of Directors and the reimbursement of travel expenses and

accommodation costs incurred by board members related to their work, there were no other transactions between the Issuer

and members of the Board of Directors.

Name

Function

Cash

compensation

Share-based payment

Anton Gauffin

1

Executive Chairman of the Board

721

338

Henric Suuronen

Non-executive director

76

-

John Salter

Non-executive director

183

-

Rod Cousens

2

Non-executive director

759

-

Krzysztof Kaczmarczyk

Non-executive director (independent)

187

-

Tom Jacobsson

Non-executive director (independent)

182

-

Total

2,108

338

Amounts of remuneration and benefits in kind of members of the Board of Directors

Costs of remuneration (including accrued bonuses) of members of the Board of Directors amounted to USD 2,108 thousand for

the year ended December 31, 2023. The Company has no formal rules for the payment of cash bonuses to members of the

Board of Directors; all such bonuses are paid on a discretionary basis.

Shares or share options held by members of the Board of Directors

The table below presents the number of shares and share options held by members of the Board of Directors as of the date of

approval of this Annual Report for publication:

Name

Function

Common Shares

Share Options

Outstanding

Anton Gauffin (through Big Bets OÜ)

3

Executive Chairman of the Board

and Executive Director

20,394,509

425,000

Henric Suuronen

Non-Executive Director

1,673,610

0

Mr. Anton Gauffin, holding the positions of the Executive Chairman of the Board and Executive Director of the Company (and

President and Chief Executive Officer of the Company until September 18, 2023) was granted with 500,000 share options in

total, out of which 75,000 had a vesting condition to provide the service continuously for about four years from the service

3

Anton Gauffin also holds one Series B Preferred Share through Big Bets OÜ.

2

Between January 1, 2023 and March 7, 2023 Mr. Rod Cousens was also a member of the Executive Management Team and

served as Co-Chief Executive Officer. Mr. Rod Cousens was not re-elected for another term of office and, accordingly, he ceased

to hold a seat in the Board of Directors on October 27, 2023.

1

Between January 1, 2023 and March 7, 2023, Mr. Anton Gauffin served as the Co-Chief Executive Officer and Executive Director

and between March 7, 2023 and September 18, 2023 he served as the Chief Executive Officer and Executive director.

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commencement date and to meet 2021 EBITDA target. These options were forfeited in 2022 as the performance condition was

not met. As at December 31, 2023 Mr. Anton Gauffin holds 425,000 outstanding options (vested and unvested).

Information on agreements known to the Company, including those concluded after the balance sheet date, that may result in

future changes in the proportion of shares held by the existing shareholders

The Company is not aware of any agreements that may result in future changes in the proportion of shares held by the existing

shareholders, except for possible changes in the proportion of shares resulting from equity-settled share option programs in the

Company.

Information on all liabilities arising from pensions

In 2023, as well as from January 1, 2024 until the date of approval of this Annual Report for publication, there were no liabilities

arising from pensions and benefits of a similar nature for former managing, supervising or former members of administrative

bodies, and no liabilities were incurred in connection with those pensions.

Information on agreements concluded between the Issuer and board members

On March 7, 2023, an agreement was concluded between the Company and Mr. Rod Cousens. The agreement terminated Mr.

Rod Cousens’s his board service and executive service as co-Chief Executive Officer of the Company by mutual agreement. In

addition the Company confirmed in the agreement Mr. Cousens’s entitlement to payment in lieu of advance 12-month notice

period for termination; this payment is included in the compensation of key management personnel presented above.

On October 23, 2023, a standard agreement for election and re-election was concluded between the Company and Mr. John

Salter confirming remuneration of Mr. John Salter as a member of the Board of Directors in accordance with Remuneration

Policy. All remuneration of Mr. John Salter as a member of the Board of Directors is included in the compensation of key

management personnel presented above.

The Company has not concluded any other agreements with members of the Board of Directors providing for compensation in

the event of the resignation or dismissal from the position held without an important reason or if the dismissal is due to the

Issuer’s merger by acquisition.

Officers; Executive management

Officers; Composition of the executive management and division of

responsibilities

Chief Executive Officer and Executive Team

The Chief Executive Officer (“

CEO

”) is responsible for supervising, directing, and controlling the business of the Company and

sees that all orders and resolutions of the Board of Directors come into effect. The Chief Executive Officer, together with any

President, also performs all duties incidental to this office that may be required by law and all such other duties as are set out

for him or her by the Board of Directors or the Bylaws.

On February 12, 2015, Mr. Anton Gauffin was appointed President and CEO of Huuuge, Inc. Mr. Rod Cousens was appointed as

co-CEO on April 7, 2022, but stepped down on March 7, 2023. On September 18, 2023 Mr. Anton Gauffin stepped down from the

position of President and CEO of the Company and was appointed as the Executive Chairman of the Board while still remaining

an executive director of the Company. On the same date, Mr. Wojciech Wronowski, who was thus far serving as the Chief

Operating Officer (not being a formal officer of the Company), was appointed a formal officer of the Company, namely the Chief

Executive Officer.

The CEO has appointed the Executive Team (not a formal body of the Company) to assist the CEO in planning and managing

operations, as well as preparing matters for discussion by the Board of Directors. Executive Team meetings are convened by

the CEO on a regular basis and the CEO serves as the chair of the Executive Team. The Executive Team prepares the Huuuge

Group’s strategic and annual planning, supervises the implementation of plans and financial reporting, and assists in processes

related to significant investments as well as mergers and acquisitions.

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The current composition of the Executive Team is as follows:

●

Wojciech Wronowski, Chief Executive Officer

●

Erik Duindam, President and Chief Operating Officer

●

Marek Chwałek, Executive Vice President of Finance

●

Maciej Hebda, Senior Vice President, Strategy & Planning

The following changes occurred in the Executive Team during 2023. On September 18, 2023, (i) Mr. Wojciech Wronowski who

was serving as the Chief Operating Officer was appointed the Chief Executive Officer, (ii) Mr. Erik Duindam who was serving as

the Chief Technology Officer was appointed the President and Chief Operating Officer. Biographies of the members of the

Executive Team are posted on our website ir.huuugegames.com.

President and Chief Operating Officer

Subject to the supervisory powers of the CEO (if the CEO is an officer other than the President), and subject to such supervisory

powers and authority as may be granted by the Board of Directors to the Chairman of the Board, and/or to any other officer, the

President has general powers of supervision, direction, and control of the business of Huuuge, Inc. and sees that all orders and

resolutions of the Board of Directors come into effect.

The Chief Operating Officer (“

COO

”) is responsible for kathe day-to-day operations and administrative functions of a company.

This includes overseeing various departments, ensuring smooth workflow, driving operational efficiencies, and implementing

strategies to improve business performance.

On September 18, 2023, Mr. Erik Duindam, who was thus far serving as the Chief Technology Officer (not being a formal officer

of the Company), was appointed the President and Chief Operating Officer.

Treasurer

The Treasurer keeps and maintains, or causes to be kept and maintained, adequate and correct books and records of accounts

of the properties and business transactions of the Company. The Treasurer deposits the funds of the Company in its name and

to its benefit and disburses such funds as may be directed by the Board of Directors. He or she provides to the Chairman of the

Board, the Chief Executive Officer and to the Board of Directors, whenever requested, an overview of the financial condition of

the Company and of his or her transactions as Treasurer. He or she performs all duties relevant for the Treasurer and such other

duties as may be set out by the Board of Directors, the Chief Executive Officer or theBylaws.

On September 18, 2023 Mr. Marek Chwałek, who was serving as Executive Vice President of Finance (not being a formal officer

of the Company), was appointed the Treasurer.

Secretary

The Secretary attends all sessions and keeps minutes of all meetings and records all votes of the Board of Directors, the

stockholders, and any standing committee, in the relevant books provided for that purpose, maintains the Company’s books,

records and stock registers, and certifies the Company’s records. He or she ensures the giving and serving of all notices of

meetings of the stockholders and of the Board of Directors. He or she performs all duties relevant for the Secretary and such

other duties as may be set out by the Board of Directors, the Chief Executive Officer, by the President or by the Bylaws.

On August 2, 2023 Mr. Yehoshua Gurtler stepped down from the position of Secretary and Mr. Anton Gauffin performed

temporarily the function of Secretary until a successor Secretary was appointed. On September 18, 2023, Ms Monika Kierepa, who

served as the Company’s General Counsel at the time was appointed as the Secretary.

Auditor

The election of an independent auditor to audit the financial statements of the Group is one of the powers of the Company’s

Board of Directors. On February 5, 2021, the Company’s Board of Directors adopted a “Policy for selecting and appointing an

audit firm to audit the financial statements of Huuuge, Inc. and the Huuuge, Inc. Group”. Once cooperation between the

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Company and the appointed audit firm has ended, the selection and appointment of another audit firm will be subject to the

provisions of the aforementioned Policy.

On

June

24,

2021

the

Board

approved

the

appointment

of

PricewaterhouseCoopers

Polska

Spółka

z

ograniczoną

odpowiedzialnością Audyt Sp. k. (“

PwC

”) as auditor for the consolidated financial statements and the separate financial

statements of Huuuge, Inc. for the year ended December 31, 2021. The final contract with PwC was signed on July 30, 2021.

On February 1, 2022 the Board approved the appointment of PwC as auditor for the consolidated financial statements and the

separate financial statements of Huuuge, Inc. for the year ended December 31, 2022 and for the year ended December 31,

2023. The final contract with PwC was signed on July 8, 2022.

There were no services performed by PwC for the Company other than audit services, including standard tax compliance

services. The remuneration of the auditor has been described in Note 25 of the Consolidated Financial Statements.

As announced in our Current Report 9/2024 dated February 6, 2024, the Board of Directors appointed Ernst & Young Audyt

Polska spółka z ograniczoną odpowiedzialnością sp. k. (“

EY Poland

”) as auditor for the consolidated financial statements and

the separate financial statements of the Company for the annual periods from January 1, 2024 to December 31, 2027.

Risk factors

The identification of risk factors takes place on the basis of the implemented risk management system. The risk management

process has been formally established in the organization based on the Risk Management Policy.

The risk management process includes:

●

risk identification;

●

risk analysis (description and assessment);

●

risk evaluation;

●

risk mitigation;

●

risk monitoring and reporting.

The most important goals of the Risk Management System include:

●

identification, analysis, assessment and evaluation of risks;

●

improvement of coherence of the approach to risk management;

●

ensuring comparability of risks occurring in different areas of organization;

●

creating a correlation between the operational and strategic level of risk management;

●

reducing the impact of adverse incidents;

●

better preparation for adverse incidents and minimization of losses caused thereby.

All employees of the organization are involved in the risk management process. The most important functions are performed by

the Board of Directors, Audit Committee, Executive Management, Risk Officer and Risk Owners.

Determination and concise naming of the most important occurring or possible events or phenomena threatening or affecting

the implementation of the goals of Huuuge Group.

Risk assessment facilitates determining the probability and impact of a risk in relation to selected scenarios (based on the

causes and results indicated in the risk analysis). The assessment is performed on the basis of defined scales. The

descriptions included therein are of an auxiliary nature and, in the case of any doubts, the score of the assessment shall have

priority.

Risk evaluation compares the risk value with the previously assumed criteria, as well as identifying risks requiring the

implementation of mitigation plans.

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At the time of the publication of this report, the following material risk factors have been identified. However, the risk factors

and uncertainties described below by the Group are not the only risk factors the Group faces. Additional risks and uncertainties

that the Group is not aware of or currently considers to be insignificant may also have a significant adverse effect on the

business, financial condition and operational results and prospects of the Group.

If we are unable to successfully attract new players or if we lose our current players, our business could be negatively

affected. We rely on purchases from a small percentage of our players for nearly all of our revenue. If we are unable to entice

players to make in-app purchases or engage with our games in ways that generate revenue, our business could be negatively

affected.

Our business depends on developing and publishing games that players download and spend time and money playing. The

nature of our industry is that we develop and test hundreds of ideas and games, but subsequently focus only on the titles or

features that exhibit the most promising key performance indicators (“KPIs”). Only a handful of our games make it to soft

launch and even fewer progress to full launch and scaling. We cannot guarantee that high-quality games, even if favorably

reviewed by players, will become “hits”. Our new games may also attract players away from our existing games, especially when

they provide similar gameplay features with an upgraded user interface or new social elements. Furthermore, we cannot ensure

that new features or upgrades to our existing games will attract new players or allow us to retain existing ones.

The growth of our business largely depends upon our ability to attract new players to our existing and new games, as well as on

retaining existing players of our games. Our success in doing so is conditional in part on unpredictable and volatile factors

beyond our control, including customer preferences, competing games, the popularity of other forms of entertainment and

economic conditions adversely affecting consumer spending. Achieving growth in our community of players may also require

us to increasingly engage in sophisticated and costly sales and marketing efforts that may not result in additional players.

Currently, we derive 99% of our revenue from in-app purchases. As our games are available to players for free, we generate

revenue from them only if they make in-app purchases above and beyond the level of free features provided as part of the

game, e.g., they purchase virtual currency beyond the amount made available for free, or if they otherwise engage with our

games in ways generating revenue. If we fail to offer games that entice players to make in-app purchases or if we fail to

properly manage the economics of free versus paid currency, or if we fail to entice players to engage with our games in ways

generating revenue, this could materially and adversely affect our business, operating results and financial condition.

We rely on a small percentage of our players for nearly all of our revenue. However, we lose paying players in the ordinary

course of business, and they may stop making purchases in our games or playing our games altogether at any time. In order to

sustain or increase our revenue levels, we must attract new paying players or increase monetization across the current player

base. To retain paying players, we must devote significant resources to, for example, marketing and data analytics, in order to

individualize offers provided to our players so that the games they play retain their interest and attract them to our other games.

Measurement of marketing performance has deteriorated significantly with the depreciation of the IDFA (Apple’s ID For

Advertisers). This has made it more challenging to acquire the right profile of a player, thereby negatively affecting our ability to

undertake large-scale user acquisition and maintain existing campaign performance and payback periods. In response, we have

been actively lowering spend levels to maintain and/or improve our payback periods. This has had an impact on our revenue

dynamics. Whilst IDFA changes were introduced in April 2021 with iOS 14.5, the ATT framework was present on a majority of

iOS devices only from H2 2021 onwards. We continue to adapt our user acquisition strategy to the new post-IDFA market reality,

such that budgets have been shifted to partners with better post-change performance.

Revenue concentration in a small number of games

The majority of our revenue is generated by a small number of our games, which could negatively affect our business. We

expect that this concentration will continue in the future. For example, our most popular games generating the highest revenue

are Huuuge Casino and Billionaire Casino. These top two franchises historically have contributed the majority of our revenue,

accounting for 96% of our revenue in 2023, 93% of our revenue in 2022 and 88% of our revenue in 2021. If we are unable to

diversify our portfolio of games in the long run and increase the popularity and improve the monetization of our existing games

or the games we develop in the future, it could have a material adverse effect on our business, operating results and financial

condition.

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

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51

Dependence on third parties’ services

We rely, to varying degrees, on a number of third-party vendors, service providers and game developers, as well as strategic

partners, to efficiently operate our business, develop games and meet the expectations of our players. In particular, some

elements of the provision and distribution chain of our gaming services are operated by third parties we do not control and

which it would take significant time to replace. This dependence is expected to continue.

We are highly dependent on distribution platforms when offering our games to players. Any adverse changes in our existing

arrangements with these third parties, including an inability to fulfill their obligations in a timely manner or an inability to enter

into or renew arrangements on favorable terms, if at all, could reduce the quality, revenue or availability of our games. Changes

to third parties’ policies or terms of service could also negatively impact our ability to offer our existing or future games, or

restrict the availability of certain features.

Changes in gaming technologies and hardware preferences

We rely, to varying degrees, on mobile and PC based hardware and specific gaming technologies (middleware like Unity) to

make our games performance attractive and interactive for our users to play our games. If new immersive technologies and

hardware would become successful over the long run or become a de facto new standard for online games, we would have to

develop new versions of our existing and new games. As technologies differ in their capabilities, performance, compatibility

across platforms and operating systems, differences between performance and gameplay within systems might affect

perception of our games. Also some of the hardware and software introduced might not receive wider acceptance across some

of our key markets. If we introduce games using new hardware or technologies when it is unclear if they would be widely

accepted by users or opposite - introduce new standards very late to our games, when a significant market shift has already

occurred, our financial performance might be affected.

Ability to retain skilled employees and further develop an attractive employer brand

The Group strives to continue to build a reputation of being an attractive employer brand and to ensure our reward and

recognition practices remain competitive. The Group has implemented a number of procedures to engage dynamically with its

employees and act on constructive feedback to improve our workplace. We undertake employee engagement surveys and carry

out salary benchmarking to ensure our core salaries remain competitive in addition to our competitive benefits packages.

Artificial Intelligence (AI) generated content present both risk and opportunities

The incorporation of AI-generated content can substantially reduce costs of game development and speed to market. However

it may limit innovation and creativity which are differentiating factors across games, leading to excessive homogenization of

gaming products. Legal ambiguity surrounding AI-generated works creates copyright concerns. Dynamic nature of AI-generated

content and tools can lead to unexpected or unwanted game elements, requiring a careful balance between AI’s creative

freedom and the need for a coherent gaming experience.

We acknowledge AI algorithms utilized in gaming have the potential to inadvertently distribute biases and inequalities, be it in

character design, dialogue systems, or gameplay mechanics. Also AI generated content must follow extended quality control to

ensure it is not violating any existing rights, patents and other elements belonging to 3rd parties. We need to ensure AI models

are trained on diverse and non-discriminatory datasets and do not create output which can be subject to 3rd party

infringements.

Disruption of IT infrastructure, networks and systems and IT gaps

We rely on information technology infrastructure, networks and systems that are important to the operation of our business. We

use such infrastructure, networks and systems to operate our games and to manage and secure our business and data,

particularly with respect to internal communications, controls and reporting and relations with suppliers.

Some of such infrastructure, networks and systems are managed or provided by third parties. These third parties are typically

under no obligation to renew agreements relating to such infrastructure, networks and systems, and there is no guarantee that

we will be able to renew these agreements on commercially reasonable terms, or at all. In addition, our information technology

infrastructure, networks and systems – including those operated by third parties – may experience breaks, suspensions or

stoppages of service, or we may experience system crashes in connection with system integration or migration work. Any

disruption or failure in these infrastructure, networks and systems could adversely affect the availability of games, could slow

them down or could otherwise disrupt the functionality or operations of the relevant business.

Huuuge, Inc.

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52

As a result of technological advancements, our IT infrastructure may become outdated or inadequate for our business needs. If

we are unable to keep our systems and infrastructure current with industry standards and with evolving technologies, our

operations or growth may be impeded.

Undetected errors, bugs or vulnerabilities

Our games and other software applications and systems, as well as the third-party platforms upon which they are made

available, could contain undetected errors, bugs or vulnerabilities that could adversely affect the performance of our games,

some of which may only be detected after the code has been released for external or internal use. For example, errors, bugs or

other types of defects could prevent our players from making in-app purchases, harm the overall game-playing experience for

our players, delay game introductions or enhancements, cause measurement errors, result in our games being non-compliant

with applicable laws or create legal liability for us. We have experienced some of these issues in the past, including lags in

gameplay, in-app purchase errors, game data corruption and problems with players’ access to our games. We resolved most of

these issues on a timely basis, but we cannot guarantee that we will be able to do so in the future. Moreover, resolving such

errors, bugs or other vulnerabilities could disrupt our operations or cause us to divert resources from other projects.

Failure to successfully pursue or implement new business initiatives

In order to grow our business, we need to evaluate, consider and effectively implement new business initiatives. Management

may not properly ascertain or assess the risks associated with these new initiatives, and subsequent events may arise that

would render our initial assessment of the economic merits of a particular initiative uneconomic.

Moreover, the market of new technologies is one that is developing rapidly. Therefore, we conduct ongoing monitoring of new

technologies and IT solutions in order to quickly adapt to the solutions introduced to the market. The failure to analyze or

implement new technologies may result in a loss of competitiveness in the market, which could have a negative impact on our

operating activities and financial results.

Business acquisitions and integrating acquired operations could divert the attention of our management and otherwise

disrupt our operations

As a part of our strategy, we may in the future explore, and have in the past carried out, acquisitions to strengthen our market

position in selected game genres and grow our game development talent. We may use our excess cash to finance extraordinary

growth events such as potential acquisitions, if the opportunity arises. We cannot guarantee we will be able to identify

acquisition targets that help us to achieve our growth strategy, or that the transactions we may consider will be completed or

prove to be successful or accretive. In addition, acquisitions and integration processes could divert our management’s attention

from other business concerns and also lead to the use of resources that are needed in other parts of our business.

Real or perceived inaccuracies in our performance metrics

We track certain performance metrics, such as Installs, DAU, DPU, ARPDAU, ARPPU, Monthly Conversion. Our performance

metrics tools have limitations, and our methodologies for tracking these metrics may change over time, which could result in

unexpected changes to our metrics, including those we report. If our performance metrics are not accurate representations of

our business, player base or traffic levels, or if we discover material inaccuracies in our metrics or if those we rely on to track

our performance do not provide an accurate measurement of our business, we may fail to obtain an accurate understanding of

the performance of our business, our reputation may be significantly harmed, or we may lose the confidence of players,

analysts or business partners, and this could adversely affect our business, operating results and financial condition.

Ineffective protection of our intellectual property

Intellectual property rights are an essential element of our business. We rely on a combination of different intellectual property

rights such as trademarks, patents and copyrights relating to our games, and proprietary or confidential information that is not

subject to formal intellectual property protection.

While we create most of the intellectual property we use internally, we also license intellectual property such as, in particular,

games (as a whole) and software development kits (“SDKs”) from third parties. In particular, our games use SDKs provided by,

among others, Facebook and Google. We also purchase or license, in whole or in part, photos, videos and audio used in our

games from third parties, including Shutterstock and Envato. We rely on licenses for all of our third-party publishing.

Huuuge, Inc.

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53

Despite our efforts to protect our owned and licensed intellectual property, unauthorized parties may attempt to copy or

otherwise obtain and use our technology, games or brands. There is a risk that the actions we take will not be sufficient to

protect our owned and licensed intellectual property. Furthermore, our use of third-party intellectual property may inadvertently

violate the rights of third parties, and therefore we could become subject to infringement claims, which we already occasionally

face.

Third-party intellectual property rights may limit our development

We need to continuously adapt our games to incorporate new technologies. If such technologies are protected by the

intellectual property rights of our competitors or other third parties, we may be prevented from introducing games based on

these technologies or expanding into markets or platforms created by these technologies.

We license SDKs, which may be integrated into our own products and are required, among other reasons, to allow our players to

connect their game accounts with their social media ones. If the owners of these SDKs, such as Google and Facebook, change

the license terms in a manner that limits our ability to use the SDKs or integrate with their platforms, our business, operating

results and financial condition may be adversely affected.

We also use open source software in our games and expect to continue to do so. Some open source software licenses require

users who distribute open source software to publicly disclose all or part of the source code to such software or make available

any derivative works of the open source code on unfavorable terms or at no cost. In addition, provisions of various open source

licenses have not been interpreted by courts, and there is a risk that such licenses could be construed in a manner that imposes

unanticipated conditions or limitations on our use of the open source software. If our use of open source software is not in

compliance with a particular license, we may be required to release our proprietary source code, pay damages for breach of

contract, re-engineer our games or products, discontinue distribution in the event that reengineering cannot be accomplished

on a timely basis, or take other remedial action that may entail additional expenses or limit our activities.

Ineffective protection of confidential information

Our management and key employees have access to sensitive confidential information relating to our business such as insights

about strategic developments, business case planning and core technology. In the event that competitors, third parties or the

general public gain access to such confidential information, whether on purpose or by accident, our market position could be

materially weakened.

We could be the target of cyber-attacks, piracy, database security breaches or hacking

Our industry is prone to – and our games, systems and networks are subject to – cyber-attacks, viruses, worms, phishing

attacks, malicious software, break-ins, theft, computer hacking, employee error or malfeasance or other security breaches that

may exploit, damage, or disrupt the functioning of our games, networks or technological infrastructure. Physical locations

where our IT infrastructure is located, as well as our hardware, may also be subject to break-ins, theft or damage.

Any security breach or incident that we experience could result in unauthorized access to, misuse of, or unauthorized

acquisition of our or our players’ data, the loss, corruption or alteration of this data, interruptions to our operations, unavailability

or malfunctioning of our games, or damage to our computers or systems or those of our players or third-party platforms.

Furthermore, third parties, such as hosted solution providers or third-party platform operators that provide services to us, could

also be a source of security risks in the event of the failure of their own security systems and infrastructure.

As threats related to cyber-attacks develop and grow, we may also find it necessary to make further investments to protect our

data and infrastructure.

Unauthorized operators may develop “hacks” or other types of “cheating” software enabling players to alter the intended game

play, abuse or exploit the mechanics of our games and, therefore, obtain unfair advantages in our games, or otherwise obtain

virtual currency or other benefits available in our games. These may have a negative impact on the volume of in-app purchases

and the amount of revenue we collect from players. In addition, such “hacks” or other similar vulnerabilities may result in

increased costs of developing technological measures to respond to them.

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

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54

The Russian invasion of Ukraine, and the associated developments on the international arena, could result in an increased risk

of cyber-attacks, which could affect our systems. We have taken action to analyze the impact of various types of cyber-attacks

and have implemented additional security measures commensurate with the potential increase of such risk.

Fluctuations in foreign exchange rates and inflationary pressures could negatively impact our business.

Our activities and businesses expose us to fluctuations in currency exchange rates between USD and other currencies, such as

the Polish zloty and the euro. These fluctuations may reach significant levels during periods of increased market volatility

related to, for example, the Russian invasion of Ukraine, the Covid-19 pandemic, climate change, or other events increasing

uncertainty in the global economy. See also “Key Factors Affecting Our Results of Operations and Market Trends”.

For further information on the Group’s exposure to foreign exchange rate volatility for the most significant currencies, see Note

7 to our Consolidated Financial Statements for full year 2023.

Our performance may also be affected by inflationary pressures and their impact on consumer spending patterns, which could

result in decreased spending on leisure and entertainment, and thereby negatively impact our revenues.

Our success and continued growth are heavily reliant on the experience and talent of our managers and skilled employees

The successful operation of our businesses and the successful implementation of our strategy are dependent on the

experience of our managers and key personnel. Due to the specifics of the industry we operate in, we are dependent on our

highly skilled, technically trained and creative employees, whose high competences and knowledge translates into developing

new technologies and creating innovative games. The loss of any of these individuals could harm our business. Competition for

employees, particularly game designers, engineers and project managers with desirable skill sets is intense, and we devote

significant resources to identifying, hiring, training, successfully integrating and retaining these employees.

Our future success depends in part on our ability to retain highly qualified managers active in the mobile games industry who

have had a significant impact on our development, as well as on our ability to attract and retain skilled employees able to

effectively operate our business. We cannot guarantee that we will be able to attract and retain such managers or skilled

employees in the future, and the costs associated with retaining them may impact our profitability or financial results.

Changes in tax laws or tax rulings, or the examination of our tax position, could materially affect our financial condition and

results of operations

We are subject to complex tax legislation in the various countries in which we operate. In particular, given the international

scope of our business and our structure, we are subject to rules on transfer pricing. Moreover, GAAR and the focus of tax

regulations on real business substance may have an increasing impact on international taxation.

For example, we sell services or use intellectual property through legal entities that must necessarily procure these services or

license such intellectual property within a group. Therefore, we perform numerous intercompany transactions. The jurisdictions

in which we operate generally have transfer pricing regulations that require transactions involving related parties to be

undertaken on properly documented arm’s length terms and conditions. If the tax authorities in a particular jurisdiction do not

regard intra-group transactions as being made on a properly documented arm’s length basis and successfully challenge such

transactions, or otherwise adopt a differing approach on the attribution of revenue or profits between our various group entities,

the amount of tax payable by the relevant member or members of our group, in respect of both current and previous years may

increase, and we may be subject to penalties or fines, or required to make interest payments.

In addition, we provide services whose price is subject to direct and indirect taxes in various countries, such as value added tax.

The complexity of our business model may complicate an understanding of the legal obligations in the relevant tax application.

We may also be subject to double taxation in jurisdictions with multiple tax authorities or incompatible tax regimes. In addition,

applicable tax rates could increase. A significant increase in value added tax rates could negatively affect our activity, especially

customer demand, which could have a material adverse effect on our business, operating results and financial condition.

Changes in tax treaties, laws, rules or interpretations or the outcome of tax audits could have an adverse effect on our

business. The tax laws and regulations in the jurisdictions in which we operate may be subject to change; for example, a

substantial amendment may be introduced to the taxation of digitized companies. New tax laws or regulations may be

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

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55

introduced with or without retroactive effect and there may be changes in the interpretation and enforcement of such tax laws

or regulations.

If the relevant tax authority challenges our tax position, through audits or otherwise, and is successful, our effective tax rate

may increase, and we may be required to pay additional taxes, penalty charges and interest, and we may incur costs in

defending litigation or reaching a settlement with the relevant tax authority. We could be liable for amounts that are either not

covered by or are in excess of our established reserves. Any of the foregoing situations could have an adverse effect on our

business, operating results and financial condition.

Competition in the gaming industry

The gaming industry, which includes social casino games (from which we derive the majority of our revenue), is considered to

be a highly competitive and rapidly evolving industry with low barriers to entry. We are experiencing, and are likely to experience

in the future, competition from other developers and publishers in the gaming category. Our competitors range from established

interactive entertainment companies to emerging start-ups, and we expect new competitors to continue to emerge globally.

Our operations depend on third-party platforms used to offer our games

Our social gaming offerings operate mainly through Apple’s App Store and Google’s Play Store, which also serve as significant

online distribution platforms for our games and provide us with valuable information and data. Consequently, our operations

depend on our continued relationships with these providers, and any emerging platform providers that are widely adopted by

our target player base.

We are subject to the standard terms and conditions that these platform providers have for application developers, which

govern the promotion, distribution and operation of games and other applications on their platforms, and which the platform

providers can change on a discretionary basis and unilaterally on short notice or without notice.

Moreover, Internet-connected devices and operating systems controlled by third parties increasingly contain features that allow

device users to disable functionality that allows for the delivery of advertising on their devices, including through Apple’s

Identifier for Advertising, or IDFA, or Google’s Advertising ID, or AAID, for Android devices. Device and browsermanufacturers

may include or expand these features as part of their standard device specifications. If players elect to utilize the opt-out

mechanisms in greater numbers, our ability to deliver effective targeted advertisements would suffer, which could adversely

impact our revenues from in-game advertising (currently less than 5% of Huuuge’s overall revenue).

In addition, new regulations and increased focus on data protection may result in changes to the data protection policies of the

platform providers, which we will be required to implement. We cannot exclude the possibility that our games, in particular

social casino games, will be targeted by other limitations introduced by third-party platform providers or our advertising and

marketing partners concerning, among others, user acquisition and advertising revenue.

Changes in third-party platforms classification of or approach towards social casino games or certain game features (such as

loot boxes) could restrict the availability of our games or of certain game features on those platforms or to users in certain

jurisdictions.

If similar events occur and we are unable to address them effectively, or if other similar issues arise that impact players’ ability

to download our games, access social features or purchase virtual currency, it could have a material adverse effect on our

business, operating results and financial condition.

We operate in an industry characterized by an evolving and partially unclear regulatory environment

Generally, social gaming, including but not limited to social casino games, is not explicitly regulated in the markets where we

operate; however, as the mobile and online game industry evolves, so too are regulations evolving and, as a result of this

evolution and possible changes in the approach of legislators, regulators and courts, we cannot exclude the possibility that our

activities could be regulated in ways that could adversely affect our business.

In some jurisdictions, there is growing opposition from regulators, public interest groups and/or media towards mobile and

online gaming, including social casino games or social gaming, as well as towards specific in-game features, such as loot

boxes. Such opposition could lead these jurisdictions to adopt legislation or impose or enforce an existing regulatory

Huuuge, Inc.

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56

framework to govern mobile and online gaming, broadly or more specifically, for example social gaming, or in-game features

such as loot boxes. Alternatively, jurisdictions or regulators could seek to apply laws we do not believe are applicable to our

games to certain types of games we offer or to games containing certain features or characteristics.

Courts may also interpret or apply laws in a manner adverse to us, notwithstanding the position taken by the relevant gambling

authority, and this may compromise our ability to continue to offer our games in particular jurisdictions.

We believe that our games do not constitute gambling in the jurisdictions in which we operate, particularly due to the free

access and lack of monetary rewards; however, we cannot exclude the possibility that gambling regulators, judicial or similar

authorities in certain jurisdictions will interpret the applicable existing or new laws in a manner classifying our games as

gambling or requiring that certain in-game features (e.g. features that are deemed to be “loot boxes”) be limited or excluded. If

any authority issues such an interpretation, we may face enforcement action on the basis of that interpretation. Moreover, if our

games are considered to be gambling in jurisdictions that prohibit online gambling, we may be forced to cease offering our

top-grossing games in such jurisdictions. If our games are classified, for regulatory purposes, in a manner differing from the

manner in which we view them, we may also be barred from promoting those games via third-party platforms (such as the

AppStore or Facebook.)

There is a risk that further legislative or regulatory developments could curtail our offering of games in certain jurisdictions,

result in a prohibition on mobile or online gaming in the jurisdictions in which we operate, restrict our ability to advertise our

games, allow our players to claim damages related to the use of our games, raise consumer protection claims, substantially

increase the cost of complying with the applicable regulations, or subject us to fines or other regulatory actions, any of which

could have an adverse effect on our business, operating results and financial condition. Finally, the increased public scrutiny of

social casino games and loot boxes could result in reputational damage to ourselves and to the industry, deter players from

participating in our games, generate negative publicity, or deter financial institutions and other third-party partners and suppliers

from cooperating with us.

We could be subjected to sanctions or other penalties for data privacy and/or data security breaches

We collect, process, store, use and share personal information and other data in order to develop new games, offer products

and features to players, and analyze the effectiveness of our marketing channels. Our business is therefore subject to a number

of laws and regulations governing data privacy and security, as well as various regulators’ guidelines, including with respect to

the collection, storage, use, transmission, sharing and protection of personal information and other consumer data applicable in

various jurisdictions. Such laws and regulations and guidelines may be inconsistent between countries or conflict with other

rules.

Any failure or perceived failure by us to comply with our posted privacy policies, our privacy-related obligations to players or

other third parties, or any other legal obligations or regulatory requirements relating to privacy, data protection, or information

security may result in governmental investigations or enforcement actions, litigation, claims, or public statements against us by

consumer advocacy groups or others and could result in significant liability, cause our players to lose trust in us, or otherwise

materially and adversely affect our reputation and business.

Furthermore, the costs of compliance with, and other burdens imposed by the laws, regulations, and policies that are applicable

to us may limit the adoption and use of, and reduce the overall demand for our games. Additionally, if third parties we work with

violate applicable laws, regulations or agreements, such violations may put our players’ data at risk, could result in

governmental investigations or enforcement actions, fines, litigation, claims or public statements against us by consumer

advocacy groups or others and could result in significant liability, cause our players to lose trust in us and otherwise materially

and adversely affect our reputation and business. Further, public scrutiny of, or complaints about, technology companies or

their data handling or data protection practices, even if unrelated to our business, industry or operations, may lead to increased

scrutiny

of

technology companies, including us, and may cause government agencies to enact additional regulatory

requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks.

Operating in multiple jurisdictions and locations

Although the US is our most significant market in terms of revenue, we generate revenue across multiple jurisdictions, and our

users originate from a large number of jurisdictions worldwide. Our main operations, including game development operations,

Huuuge, Inc.

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57

are located in Poland. We operate offices in different cities worldwide, including Tel Aviv, Israel; Limassol, Cyprus; Amsterdam,

Netherlands; Helsinki, Finland, and London, UK.

Our operations in multiple jurisdictions could subject us to additional risks customarily associated with such operations,

including: the complexity of laws and regulations in different jurisdictions and markets; ambiguity or inconsistency resulting

from conflicts-of-laws; the uncertainty of enforcement of remedies in various jurisdictions; the effect of currency exchange rate

fluctuations; the impact of various labor laws and disputes; the ability to attract and retain key personnel in different

jurisdictions;

the

economic, tax and regulatory policies of local governments; compliance with applicable anti-money

laundering, anti-bribery and anti-corruption laws, including the Foreign Corrupt Practices Act and other anti-corruption laws that

generally prohibit US persons and companies and their agents from offering, promising, authorizing or making improper

payments to foreign government officials for the purpose of obtaining or retaining business; and compliance with applicable

sanctions regimes regarding dealings with certain persons or countries. Moreover, foreign jurisdictions could impose tariffs,

quotas, trade barriers and other similar restrictions on our international sales.

Our international business operations could be interrupted and negatively affected by terrorist activity, political unrest or other

economic or political uncertainties. We operate in locations that are regularly affected by such events, including Tel Aviv.

The Russian invasion of Ukraine is likely to present obstacles to our collaboration with entities located in Ukraine with which we

have commercial relationships. We are constantly reviewing the circumstances affecting our partners and taking available and

appropriate measures to mitigate the potential impact on our operations, as well as assist our partners where possible. The

international sanctions imposed on Russia may also have an impact on our operations, which at the date of publication of this

report we do not expect to be materially adverse. Finally, an escalation of the war in Ukraine could potentially impact the

operations of our offices in Poland, and we are therefore constantly monitoring the situation with a view to taking any necessary

mitigation steps to ensure the safety of our teams and the continuity of operations.

Legal proceedings may materially adversely affect our business and our results of operations, cash flows and financial

condition

We have been party to, and in the future may become subject to legal proceedings including with respect to consumer

protection, gambling related matters, employee matters, alleged service and system malfunctions, alleged intellectual property

infringement and claims relating to our contracts, licenses and strategic investments. Legal proceedings targeting our social

casino games and claiming violations of state, federal or local laws in jurisdictions where we operate could also occur based on

the unique and specific laws of each jurisdiction.

Player use of our games is subject to our privacy policy and terms of service. If we fail to comply with our posted privacy policy,

terms of service or similar agreements, or if we fail to comply with applicable privacy-related or data protection laws and

regulations, this could result in litigation, proceedings or investigations against us by governmental authorities, players or

others, which could result in fines or judgments against us, damage our reputation or goodwill, impact our financial condition

and harm our business.

We cannot predict the likelihood, timing or scope of any legal proceedings to which we may be a party, any of which could have

a material adverse effect on our business, operating results and financial condition.

We may incur significant expenses defending any lawsuits to which we may be a party, even if we eventually prevail in such

proceedings or if they are found to be without merit, and lawsuits may result in the imposition of damages, restitution, fines or

other penalties that could have a material impact on our financial results.

Our shareholders’ rights under Delaware law differ from shareholder rights under Polish law

The Company is a Delaware corporation, and therefore its structure, operating procedures and the relationships between

shareholders are governed by the laws of the State of Delaware and US federal laws, including US securities laws.

The principles underlying these laws differ from those underlying Polish law in many respects. Therefore, the rights of our

shareholders are in many instances different from those of shareholders of Polish companies.

Huuuge, Inc.

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Best practices

Since February 19, 2021, the Company has been subject to and has applied WSE Best Practices, except for the principles that

cannot be adhered to or that are impracticable due to the differences between the US and Polish legal system or where this

contradicts the provisions of Delaware or US federal law.

During the fiscal year ending December 31, 2023, the Company complied with the principles of corporate governance included

in

the

document

„Best

Practices

WSE

Huuuge,”

according

to

a

statement

posted

on

the

website:

https://ir.huuugegames.com/best-practices.

During the fiscal year ending December 31, 2023. The Company did not comply with the following corporate governance

principles:

1. DISCLOSURE POLICY, INVESTOR COMMUNICATIONS

1.3.

Companies integrate ESG factors in their business strategy, including in particular:

1.3.1.

environmental factors, including measures and risks relating to climate change and sustainable development;

This principle is not applied.

The company has an ESG committee that addresses these issues and is working on the ESG strategy, which will include

environmental factors.

1.4.

To ensure quality communications with stakeholders, as a part of the business strategy, companies publish on their

website information concerning the framework of the strategy, measurable goals, including in particular long-term goals,

planned activities and their status, defined by measures, both financial and non-financial ESG information concerning the

strategy should among others:

This principle is not applied.

To ensure quality communication with stakeholders, the Issuer publishes the assumptions of its business strategy, including

strategic goals and development directions, on its website. Progress in implementing this strategy, including a description of

significant achievements and setbacks, is presented in the Company's financial reports. In addition, progress in the strategy is

commented on by management during earnings conferences. The Issuer does not include all ESG factors in its business

strategy.

1.4.1.

explain how the decision-making processes of the company and its group members integrate climate change, including

the resulting risks;

This principle is not applied.

The company has an ESG committee that addresses climate change among other issues. The ESG committee, together with

the Board of Directors, will examine the extent to which, given the nature of the company’s business, consideration of these

factors in decision-making is appropriate, both for the interests of the company and the environment. The ESG committee is

working on including climate change issues in the company's reporting.

1.4.2.

present the equal pay index for employees, defined as the percentage difference between the average monthly pay

(including bonuses, awards and other benefits) of women and men in the last year, and present information about actions

taken to eliminate any pay gaps, including a presentation of related risks and the time horizon of the equality target.

This principle is not applied.

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The Issuer does not publish equal pay index data. The Issuer hires and remunerates its employees on the basis of their

competences, experience and knowledge, without any gender discrimination. There is an internal working group at the Issuer

that addresses issues of Diversity, Equity and Inclusion, including with respect to remuneration.

2. MANAGEMENT BOARD, SUPERVISORY BOARD

2.1.

Companies should have in place a diversity policy applicable to the management board and the supervisory board,

approved by the supervisory board and the general meeting, respectively. The diversity policy defines diversity goals and

criteria, among others including gender, education, expertise, age, professional experience, and specifies the target dates and

the monitoring systems for such goals. With regard to the gender diversity of corporate bodies, the participation of the minority

group in each body should be at least 30%.

This principle is not applied.

Although the Issuer does not have a formal diversity policy in place, the Issuer takes diversity goals into consideration when

developing the Company’s strategy and plans. The global management does monitor various diversity indices and takes a

proactive approach to improve them and assure, among others, equitable representation of genders at all levels of the

Company.

2.2.

Decisions to elect members of the management board or the supervisory board of companies should ensure that the

composition of those bodies is diverse by appointing persons ensuring diversity, among other things in order to achieve the

target minimum participation of the minority group of at least 30% according to the goals of the established diversity policy

referred to in principle 2.1.

This principle is not applied.

See explanation to point 2.1. above.

2.7.

A company’s management board member may sit on the corporate bodies of companies other than members of its group

subject to the approval of the supervisory board.

This principle is not applied.

According to the Issuer’s Certificate of Incorporation, the consent of the Board of Directors is not required for the CEO,

President (or any Director or Officer) to sit on the management or supervisory board of companies other than members of the

Issuer’s group. The Issuer maintains a Conflict of Interests policy designed to prevent conflicts of interest at all levels.

2.11.

In addition to its responsibilities laid down in the legislation, the supervisory board prepares and presents an annual

report to the annual general meeting once per year. Such report includes at least the following:

2.11.1.

information about the members of the supervisory board and its committees, including indication of those supervisory

board members who fulfil the criteria of being independent referred to in the Act of 11 May 2017 on Auditors, Audit Firms and

Public Supervision and those supervisory board members who have no actual and material relations with any shareholder who

holds at least 5% of the total vote in the company, and information about the members of the supervisory board in the context

of diversity;

The principle is not applied.

This information is included in the annual report. However, the Issuer is incorporated in Delaware and has one governing body,

the Board of Directors, which approves the annual report (unlike in Polish companies). Accordingly, in the Company's opinion,

presenting the aforementioned parts of the annual report is impracticable at the annual general meeting due to differences

between the Polish and US legal systems.

2.11.2.

summary of the activity of the supervisory board and its committees;

The principle is not applied.

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This information is included in the annual report. However, the Issuer is incorporated in Delaware and has one governing body,

the Board of Directors, which approves the annual report (unlike in Polish companies). Accordingly, in the Company's opinion,

presenting the aforementioned parts of the annual report is impracticable at the annual general meeting due to differences

between the Polish and US legal systems.

2.11.3.

assessment of the company’s standing on a consolidated basis, including assessment of the internal control, risk

management and compliance systems and the internal audit function, and information about measures taken by the

supervisory board to perform such assessment; such assessment should cover all significant controls, in particular reporting

and operational controls;

The principle is not applied.

This information is included in the annual report. However, the Issuer is incorporated in Delaware and has one governing body,

the Board of Directors, which approves the annual report (unlike in Polish companies). Accordingly, in the Company's opinion,

presenting the aforementioned parts of the annual report is impracticable at the annual general meeting due to differences

between the Polish and US legal systems.

2.11.4.

assessment of the company’s compliance with the corporate governance principles and the manner of compliance

with the disclosure obligations concerning compliance with the corporate governance principles defined in the Exchange Rules

and the regulations on current and periodic reports published by issuers of securities, and information about measures taken

by the supervisory board to perform such assessment;

The principle is not applied.

This information is included in the annual report. However, the Issuer is incorporated in Delaware and has one governing body,

the Board of Directors, which approves the annual report (unlike in Polish companies). Accordingly, in the Company's opinion,

presenting the aforementioned parts of the annual report is impracticable at the annual general meeting due to differences

between the Polish and US legal systems.

2.11.5.

assessment of the rationality of expenses referred to in principle 1.5;

The principle is not applied.

This information is included in the annual report. However, the Issuer is incorporated in Delaware and has one governing body,

the Board of Directors, which approves the annual report (unlike in Polish companies). Accordingly, in the Company's opinion,

presenting the aforementioned parts of the annual report is impracticable at the annual general meeting due to differences

between the Polish and US legal systems.

2.11.6.

information regarding the degree of implementation of the diversity policy applicable to the management board and the

supervisory board, including the achievement of goals referred to in principle 2.1.

The principle is not applied.

The Issuer does not have a formal diversity policy, please refer to explanation to principle 2.1.

3. INTERNAL SYSTEMS AND FUNCTIONS

3.4.

The remuneration of persons responsible for risk and compliance management and of the head of internal audit should

depend on the performance of delegated tasks rather than short-term results of the company.

The principle is not applied.

In reference to the internal audit team, this principle is fully applied. In respect to the risk management functions, the

processes were internalized in the middle of 2023 and the remuneration of respective personnel members was not yet adapted

in accordance with the principle. The Company intends to adapt the remuneration system of risk management & compliance

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personnel in 2024 to fully comply with the principle.

3.5

Persons responsible for risk and compliance management report directly to the president or other member of the

management board.

This principle is not applied.

The Issuer has a one-tier management structure; therefore, the principle regarding members of the management board does

not apply directly to the Issuer. The Issuer is incorporated in Delaware and has one governing body, the Board of Directors.

Person responsible for risk management reports directly to the Senior Director of Accounting, Reporting and Internal Control

and indirectly to EVP Finance, a member of the executive management team and Issuer’s Officer. The person responsible for

compliance management reports to the General Counsel, an Issuer’s Officer.

3.6

The head of internal audit reports organizationally to the president of the management board and functionally to the chair

of the audit committee or the chair of the supervisory board if the supervisory board performs the functions of the audit

committee.

This principle is not applied.

The Issuer has a one-tier management structure; therefore, the principles regarding members of the management board do not

apply directly to the Issuer. The Issuer is incorporated in Delaware and has one governing body, the Board of Directors. The

Head of Internal Audit was appointed by and reports to the Audit Committee of the Board of Directors and administratively

reports to the EVP Finance, who is a member of the executive management team and Issuer’s Officer.

3.7.

Principles 3.4 to 3.6 apply also to members of the company’s group which are material to its activity if they appoint

persons to perform such tasks.

The principle is not applied.

The positions responsible for risk and compliance management and internal audit are group-wide positions. Please refer to

comments to points 3.4 to 3.6 for reference.

4. GENERAL MEETING, SHAREHOLDER RELATIONS

4.12

Resolutions of the General Meeting concerning an issue of shares with subscription rights should specify the issue price

or the mechanism of setting the price or authorize the competent body to set the price prior to the subscription right record

date within a timeframe necessary for investors to make decisions.

This principle is not applied.

The Issuer is a Delaware corporation and, accordingly, the provisions of the Commercial Companies Code do not apply. The

shares are issued by the Board of Directors within the authorization of the Certificate of Incorporation.

4.14.

Companies should strive to distribute their profits by paying out dividends. Companies may retain all their earnings

subject to any of the following criteria:

a) the earnings are minimal and consequently the dividend would be immaterial in relation to the value of the shares;

b) the company reports uncovered losses from previous years and the earnings are used to reduce such losses;

c) the company can demonstrate that investment of the earnings will generate tangible benefits for the shareholders;

d) the company generates insufficient cash flows to pay out dividends;

e) a dividend payment would substantially increase the risk to covenants under the company’s binding credit facilities or terms

of bond issue;

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f) retention of the company’s earnings follows recommendations of the authority which supervises the company by virtue of its

business activity.

The principle is not applied.

The Issuer is incorporated under the laws of Delaware and is listed on the Warsaw Stock Exchange. The legal framework

underlying such status results in the Issuer considering alternative profit distribution mechanisms like share buybacks in lieu of

dividend payments as they have similar economic effects. Decisions to distribute dividends or conduct share buybacks are

made by the Board of Directors after considering the financial standing, cashflows and economic environment on a

case-by-case basis.

6. REMUNERATION

6.4.

As the supervisory board performs its responsibilities on a continuous basis, the remuneration of supervisory board

members cannot depend on the number of meetings held. The remuneration of members of committees, in particular the audit

committee, should take into account the additional workload on the committee.

This principle is not applied.

The Issuer does not have a supervisory board. Although the main part of the non-executive directors’ remuneration consists of

a fixed annual salary and an additional salary for holding the positions in Board Committees (if any), they are additionally

remunerated for participating in board meeting so, technically, small part of their remuneration is dependent on the number of

meetings held.

Internal control and risk management

The Company’s Chief Executive Officer is responsible for the Company’s and Group’s internal control system and the Board of

Directors is responsible for supervision over the adequacy of the internal control system and over monitoring its effectiveness.

In addition, the Board of Directors is responsible for supervision over the preparation of the Group’s consolidated financial

statements in accordance with IFRS, as well as the Company’s separate financial statements, which will also be prepared

in accordance with IFRS.

The purpose of an effective internal control system over financial reporting is to ensure the adequacy and correctness of the

financial information contained in the financial statements and interim and annual reports.

During the preparation of the Group’s consolidated financial statements, the verification of the financial statements by an

independent auditor is one of the main elements of the audit. The responsibilities of the auditor include, in particular, an audit of

the annual consolidated financial statements. Substantially the same principles apply to the Company’s separate financial

statements. In addition to the audit of the annual consolidated and separate financial statements, the auditor’s responsibilities

include a review of the semi-annual separate and consolidated financial statements.

The Board of Directors elects an independent auditor. Upon the auditor’s completion of the audit, the consolidated financial

statements are sent to the members of the Board of Directors, which assesses the Company’s consolidated financial

statements with regard to their compliance with the books and documents as well as with the facts. Substantially the same

procedures apply to the Company’s separate financial statements.

The Board of Directors supervises the preparation of the Group’s consolidated financial statements. The Board of Directors is

required to ensure that the Group’s consolidated financial statements and business statements meet the legal requirements.

The Company’s CEO approves and signs the Group’s consolidated financial statements based on the authorisation from the

Board of Directors. Substantially the same procedures apply to the Company’s separate financial statements.

The supervision over the preparation of the separate financial statements of the Subsidiaries is conducted by their respective

corporate bodies. The Company oversees such processes based on the available corporate powers and monthly reporting used

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by the Group. Additionally, the Issuer ensures the existence and effectiveness of such internal controls within the Group,

including the Subsidiaries, as it deems necessary to enable the preparation of consolidated financial statements that are free

from material misstatement, whether due to fraud or error.

The Group’s consolidated financial statements are prepared by the finance team in cooperation with the Company’s CEO and

Company’s Treasurer and reviewed and approved by the Board of Directors before the issuance of an independent auditor’s

opinion. The financial data used in the annual and interim consolidated financial statements, as well as the monthly reporting

used by the Group, derive from the Group’s financial and accounting system and the financial systems used by external

accounting teams. After all the predefined processes concerning the closing of the books have been completed at the end of

each month, detailed financial and operational reports are prepared and, at the end of each quarter, additional consolidated

IFRS reports. The Company applies consistent accounting principles when presenting financial data in financial statements and

periodic financial reports.

The Company’s separate financial statements are prepared by the finance team in cooperation with the Company’s CEO and

Company’s Treasurer and reviewed and approved by the Board of Directors before the issuance of an independent auditor’s

opinion. The financial data used in the annual and interim separate financial statements as well as the monthly reporting used

by the Company derive from the Company’s financial and accounting system.

The Company reviews the quality of its internal control and risk management systems with regard to the preparation of the

consolidated financial statements. Substantially the same practice applies to the internal control and risk management

systems with regard to the preparation of the Company’s separate financial statements.

Diversity policy

In 2022 the Company established an internal working group to address issues of Diversity, Equity and Inclusion, including with

respect to remuneration. One of the matters to be addressed by the working group is the preparation of a group-wide diversity

policy and the works on the policy are continuing as of the date of approval of this Annual Report for publication.

Related parties

Transactions between the Company and its subsidiaries on non-market terms

There were no transactions between the Company and its subsidiaries on non-market terms during the year 2022 and 2023.

Transactions between the Company and its subsidiaries are described in Note 18 of the Separate Financial Statements for

2023.

Loan financing transactions in the Group

On March 7, 2023, loan agreements were signed between subsidiaries wholly owned by Huuuge Inc. and the two members of

the Group Executive Management team. Based on the agreements, the two members of the Group Executive Management

team received the loans in the total amount equivalent to USD 213 thousand, both for a six-month period at 5.5% interest rate,

which have been fully repaid as at December 31, 2023.

Transactions between the Company and its shareholders

On July 4, 2023, Anton Gauffin (through Big Bets OÜ) and Raine Group (through RPII HGE LLC), sold 7,906,705 shares in total

under the Share Buy-back amounting to USD 69,268 thousand.

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Transactions between the Company and the Board of Directors

On July 4, 2023, Anton Gauffin (through Big Bets OÜ) and Raine Group (through RPII HGE LLC), sold 7,906,705 shares in total

under the Share Buy-back amounting to USD 69,268 thousand.

Except for the transactions mentioned above and in the section “Agreements with Board of Directors”, i.e. the remuneration paid

by the Issuer to members of the Board of Directors and shares and share options held by members of the Board of Directors,

there were no other transactions between the Issuer and the members of the Board of Directors.

Transactions concluded between the Subsidiaries and related parties

Except for the transactions mentioned below, in the year ended December 31, 2023, the Subsidiaries did not conclude any

transactions with related parties of the Company other than the Subsidiaries.

Rules for amending the issuer’s certificate of incorporation

The Certificate of Incorporation can be amended or repealed in the manner prescribed by the laws of the State of Delaware and

all rights conferred upon shareholders are granted subject to this reservation. Under the Certificate of Incorporation, the

following provisions in the Certificate of Incorporation may be amended, altered, repealed or rescinded, in whole or in part,

directly or indirectly, only by an affirmative vote of the holders of at least 66 and 2/3% of the voting rights of the Company’s

outstanding shares: Article V, Article VI, Article VII, Article VIII, Article IX, Article X and Article XI.

The Company’s Board of Directors is authorized to adopt, amend or repeal the Bylaws without the assent or vote of the

shareholders. The affirmative vote of the holders of at least 66 and 2/3% of the voting power of the Company’s outstanding

shares shall be required in order for the Company’s shareholders to alter, amend, repeal or rescind, in whole or in part, any

provision of the Bylaws or to adopt any provision inconsistent therewith.

As long as at least one Series A Preferred Share or one Series B Preferred Share is issued and outstanding, the Corporation

shall not amend, alter, or repeal any provisions of the Certificate of Incorporation or Bylaws concerning rights of the holders of

the Series A Preferred Shares or holders of the Series B Preferred Shares, without the written consent or affirmative vote of the

holders of at least a majority of the then outstanding Series A Preferred Shares and Series B Preferred Shares.

Changes in the basic principles of management

The Issuer did not make any changes to the basic principles of management of the Issuer’s enterprise and its Group.

Identification of significant court cases

As at the date of approval of this Annual Report for publication , the Company has become involved in a number of pending

litigations:

●

On March 8, 2023, a plaintiff filed a complaint in the Circuit Court of Franklin County Alabama alleging that the

Company’s social casino games are unlawful gambling under Alabama law. The plaintiff withdrew the original

complaint without prejudice for procedural reasons, and, on September 14, 2023, re-filed an amended complaint. As

in the original complaint, the lawsuit seeks to recover all amounts paid by Alabama residents to the Company in

those games during the period beginning one year before the filing of the lawsuit (ie. September 14, 2022) until the

case is resolved. The Company does not agree with the allegations and requests for relief made in the complaint and

believes that there are meritorious legal and factual arguments supporting the Company’s position. On November 1,

2023, the Company filed a motion to dismiss the amended complaint and on December 15, 2023, the Company filed a

motion to compel arbitration. Oral arguments for the motions took place on February 26, 2024, and the court has not

issued a ruling on the motions as of the date of approval of this Annual Report for publication.

As of the date of

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approval of these Annual Report for publication, to the best of the Company's knowledge, the litigation is not

expected to have a material impact on the Company's operations, financial condition or cash flows.

●

On May 18, 2023, the Company received a demand for arbitration, alleging that the Company’s social casino games

are unlawful gambling under Kentucky law. The claimant seeks no monetary damages, only declaratory relief.

However, if the arbitrator grants the requested declaratory judgments, the claimant may file a civil class action and

seek to recover treble the total of all amounts paid by Kentucky residents to the Company in those games during the

period beginning five years before the filing of the demand (ie. May 18, 2018) until the case is resolved. An arbitrator

has been appointed, and the first preliminary management hearing with the arbitrator was held on January 18, 2024.

The Company does not agree with the allegations and requests for relief made in the demand and believes that there

are meritorious legal and factual arguments supporting the Company’s position. As of the date of approval of these

Annual Report for publication, to the best of the Company's knowledge, the arbitration is not expected to have a

material impact on the Company's operations, financial condition or cash flows.

●

On June 2, 2023, plaintiffs filed a complaint in the US Federal District Court for the Central District of California,

alleging: (a) that the Company’s social casino games are unlawful gambling under the laws of California, Illinois, and

potentially other US states; and (b) that the Company’s display of sale pricing in its social casino games constitutes

false advertising under the laws of California, Illinois and potentially other US states. The lawsuit purports to be a

nationwide class action, which also includes potential California and Illinois subclasses. The Company does not

agree with the allegations and requests for relief made in the complaint and believes that there are meritorious legal

and factual arguments supporting the Company’s position. As of the date of approval of these Annual Report for , the

Company and the plaintiffs have signed an agreement to settle the case in exchange for the distribution to each class

member of at least 375 virtual diamonds within the Company’s games, and at least an aggregate total of 412.5

million virtual diamond, and USD 1,700 thousand in cash for attorneys’ fees, costs of claims administration, and

named plaintiff incentive awards. The settlement is subject to the approval by the relevant court, thus there is no

certainty that any such settlement will be finally consummated. If the settlement is approved, the resulting class

action waiver will bar false advertising claims nationwide, and illegal gambling claims for residents of California and

Illinois, from applicable time periods prior to the settlement.The settlement would not as a legal matter preclude the

other matters referred to in this section from proceeding. The Company also believes, but cannot make any

assurance, that the settlement would not have impact on the other matters referred to in this section, since they

pertain to other issues in different states. The Company created a provision in the amount of USD 1,700 thousand,

which, to the best belief of the Company’s management, adequately reflects the financial exposure for the Company

as of December 31, 2023 and as of the date of approval of the Annual Report for publication.

●

On June 28, 2023, a claimant filed a demand for arbitration alleging that the Company’s social casino games are

unlawful gambling under Kentucky law. The claimant seeks to recover all amounts paid by Kentucky residents to the

Company in those games during the period beginning five years before the filing of the demand (ie. June 28, 2018)

until the case is resolved. An arbitrator has not yet been appointed. The Company does not agree with the allegations

and requests for relief made in the demand and believes that there are meritorious legal and factual arguments

supporting the Company’s position. As of the date of approval of these Annual Report for publication, to the best of

the Company's knowledge, the arbitration is not expected to have a material impact on the Company's operations,

financial condition or cash flows.

●

On July 25, 2023, a claimant filed a demand for arbitration alleging that the Company’s social casino games are

unlawful gambling under Ohio law. The

claimant seeks to recover all amounts they paid to the Company in those

games during the period beginning two years before the filing of the demand (ie. July 25, 2021) until the case is

resolved. The arbitration is in preliminary stages. The Company does not agree with the allegations and requests for

relief made in the demand and believes that there are meritorious legal and factual arguments supporting the

Company’s position. As of the date of approval of this Annual Report for publication, to the best of the Company's

knowledge, the arbitration is not expected to have a material impact on the Company's operations, financial condition

or cash flows.

●

On July 25, 2023, a claimant filed a demand for arbitration alleging that the Company’s social casino games are

unlawful gambling under Massachusetts law. The claimant seeks to recover all amounts they paid to the Company in

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those games during the period beginning three years before the filing of the demands (ie. July 25, 2020) until the case

is resolved. The arbitration is in preliminary stages. The Company does not agree with the allegations and requests

for relief made in the demand and believes that there are meritorious legal and factual arguments supporting the

Company’s position. As of the date of approval of this Annual Report for publication, to the best of the Company's

knowledge, the arbitration is not expected to have a material impact on the Company's operations, financial condition

or cash flows.

●

On November 13, 2023, a plaintiff filed a complaint in the Circuit Court of Coffee County Tennessee alleging that the

Company’s social casino games are unlawful gambling under Tennessee law. The lawsuit seeks to recover all

amounts paid by Tennessee residents to the Company in those games during the period beginning one year before

the filing of the lawsuit (ie. November 13, 2022) until the case is resolved. The Company does not agree with the

allegations and requests for relief made in the complaint and believes that there are meritorious legal and factual

arguments supporting the Company’s position. On December 21, 2023 the Company removed the case to the US

District Court for the Eastern District of Tennessee. On January 22, 2024 plaintiff filed an amended complaint

substituting Huuuge Global Limited as defendant in place of the Company, and a motion to remand the case back to

the state circuit court. As of the date of approval of this Annual Report for publication, to the best of the Company's

knowledge, the litigation is not expected to have a material impact on the Company's operations, financial condition

or cash flows.

Except for the abovementioned proceedings, neither the Company nor any of its subsidiaries were, as at December 31, 2023, or

as at the date of approval of this Annual Report for publication, a party to any significant court or arbitration proceedings or

before any public authority.

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GLOSSARY

ARPDAU

Average revenue per daily active user

ARPPU

Average revenue per paying user

DAU

The number of individual users who played a game on a particular day

DPU

The number of players (active users) who made a purchase on a given day

eCPI

Cost of one Install in a given period (including installs acquired from paid channels as well as

installs not directly related to paid user acquisition channels)

Free-to-play

A games sales model where the game is downloaded by the user for free, and its creators earn

money through in-app advertising or in-app purchases (players purchase in-game items, skills,

experience points, etc.)

Casual games

A type of game designed for players with the following features: (i) as a general rule, not feeling

the need or not being able to spend a significant amount of time playing, (ii) not needing to

improve their gaming skills in a significant way, iii) preferring relatively simple and easy-to-learn

game mechanisms

Social casino games

The type of games in which a player can play a certain number of slot machines; the player also

has the opportunity to participate in other casino games

Live events

Real-time events, promotions and special offers enabling players to win additional prizes or to

improve gameplay

Live Ops

Activities aimed at increasing the player engagement, including by adding new features to games,

recurring and one-off virtual events in which players can participate, and active management of

promotions within the game

LTV

Life-Time Value – estimated total revenue generated from a model player

MAU

The number of individual users who played a game during a particular month

Monthly Conversion

The percentage of MAU that made at least one purchase in a month during the same period.

In-app purchases

In-app purchases Payments made by users after downloading a game, in connection with the

purchase

of

additional

game

features.

Can be made through various non-cash payment

instruments (e.g. payment card, transfer), various electronic channels (e.g. e-banking, mobile

phone) or using payment service providers (e.g. PayPal)

Monetization

The process of generating revenue from games through, among other things, in-app purchases

and in-app advertising

MPU

The number of players (active users) who made a purchase at least once in a given month

Retention

The number of users who continued to use the game after a certain period of time after

downloading the application

RTB

Real-Time Bidding - it refers to the practice of buying and selling ads in real time on a

per-impression basis in an instant auction

User acquisition

The process of acquiring users through paid campaigns or promotional offers

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BOARD OF DIRECTORS’ STATEMENTS

Pursuant to the requirements of the Regulation of the Minister of Finance of March 29, 2018 on current and periodic

information provided by issuers of securities and on conditions under which information required by legal regulations of a

non-member state may be recognized as equivalent, the Board of Directors of Huuuge, Inc. hereby represents that:

●

to the best of its knowledge, the annual financial statements and the comparative information were prepared in accordance

with the currently effective accounting principles, and they reflect in a true, fair and clear way the financial position results

of the Company, and the Board of Directors’ report on activities contains a true image of the Company’s development,

achievements and standing, including description of basic risks and threats;

●

within the scope of its competences, the Board of Directors supervised the process of preparing the annual financial

statements and the comparative information and the Board of Directors’ report on activities for the year ended December

31, 2023;

●

the selection of the audit firm conducting the audit of the annual financial statements has been made in accordance with

the applicable regulations, including the selection and procedure for the selection of an audit firm;

●

the audit firm and the members of the audit team met the conditions for preparing an impartial and independent audit

reports on the annual financial statements in accordance with applicable regulations, professional standards and

professional ethics;

●

it adopted a policy governing the selection of an audit firm and a policy governing the provision of additional non-audit

services to the issuer by an audit firm, its related parties and members of its network, including services conditionally

exempt from the prohibition on being provided by an audit firm;

●

the Company complies with the applicable regulations related to the rotation of the audit firm and the key statutory auditor

and mandatory grace periods;

●

the Company observes regulations that govern the appointment, composition and operations of the Audit Committee,

including in particular the fulfillment of independence criteria by its members and requirements concerning knowledge and

skills related to the industry in which the issuer operates, as well as to accounting or the audit of financial statements;

●

the audit committee performed the tasks of the audit committee provided for in the applicable regulations;

●

because of the Company's monistic corporate governance system, the Company does not have a separate supervisory

body within the meaning of § 70 (1) (14) and § 71 (1) (12) of the Regulation of the Minister of Finance of March 29, 2018

on current and periodic information provided by issuers of securities and on conditions under which information required by

legal regulations of a non-member state may be recognized as equivalent (Journal of Laws of 2018, item 757). The Board

of Directors has positively evaluated the financial statements and the consolidated statements in terms of their conformity

with the books and documents as well as with the facts. The Company's Board of Directors assessed the aforementioned

statements after reviewing their content, as well as information from the Company’s independent auditor and the Audit

Committee of the Board of Directors, which included: i) the independent auditor’s report on the audit of the Company’s

financial statements for the fiscal year 2023, ii) the independent auditor’s report on the audit of the Company's consolidated

financial statements for fiscal year 2023 and iii) presentation of the auditor to the Audit Committee of the Board of

Directors and the meetings of the Audit Committee with the representatives of the auditor, including the key registered

auditor, followed by a recommendation of the Audit Committee of the Board of Directors with respect to an evaluation of

the financial statements and the consolidated financial statements. In view of the above, the Board of Directors has made a

positive assessment of the said financial statements. Due to the Company’s monistic corporate governance system, the

Board of Directors cannot make the declarations referred to in § 70 (1) (14) and § 71 (1) (12) of the Regulation of the of the

Minister of Finance of March 29, 2018 on current and periodic information provided by issuers of securities and on

conditions, regarding the issuer's management report and the issuer's group management report, as the Board of Directors

is itself responsible for the equivalent of the aforementioned reports (Board of Directors’ report on activities), which was

prepared jointly for the Company and the Group;

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

This version is a pdf of the executed xHTML Annual Report for the 12-month period ended December 31, 2023. In case of any

discrepancies xHTML version shall prevail.

69

●

the Company, being a Delaware-incorporated company, is not subject to the obligation to prepare a statement of

non-financial information designated by Section 49b (1) of the Polish Accounting Act (Journal of Laws of 2023, item 120,

295, 1598) and § 70 paragraph 1 point 5) and § 71 paragraph 1 point 5) of the Regulation of the Minister of Finance of

March 29, 2018, on current and periodic information provided by issuers of securities and on conditions under which

information required by legal regulations of a non-member state may be recognized as equivalent (Journal of Laws of 2018,

item 757).

On behalf of the Board of Directors of Huuuge, Inc.

____________________

Anton Gauffin

Executive Chairman of the Board

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

This version is a pdf of the executed xHTML Annual Report for the 12-month period ended December 31, 2023. In case of any

discrepancies xHTML version shall prevail.

70

Unanimous Written Consent of the Board of Directors of Huuuge, Inc.

March 11, 2024

The undersigned, being all of the members of the Board of Directors (the “

Board

”) of HUUUGE, INC., a Delaware

corporation (the “

Company

”), following diligent review of the facts and related documents, have not uncovered any information

to indicate that the Company should not execute the measures covered by this consent and, therefore, do hereby adopt the

following resolutions by unanimous written consent (the “

Board Consent

”) in lieu of a meeting in accordance with Section

141(f) of the Delaware General Corporation Law (“

DGCL

”) and the Bylaws of the Company, and further waive any and all notices

that may be required to be given with respect to a meeting of the directors of the Company:

●

Whereas

, the Company’s CEO, Wojciech Wronowski and Huuuge Capital Group EVP Finance, Marek Chwałek, have

presented to the Board the consolidated financial statements of the Company for the full year period ended December 31,

2023 (“

Consolidated Financial Statements

”), the separate financial statements of the Company for the full year period

ended December 31, 2023 (“

Separate Financial Statements

”) and the annual report for the full year ended December 31,

2023 (including certain representations of the Board to this report which are included therein in the document titled

“Board of Directors’ Statements”) (“

Annual Report

” and together with the Consolidated Financial Statements and

Separate Financial Statements, the “

Reports

”) as attached herein as Exhibit A to this Board Consent; and

●

Whereas

, the Company desires to approve and publish the Reports;

●

Whereas

, the Board is required to make certain representations within the Annual Report and intends to give Mr. Anton

Gauffin authorization to give such representations by executing them in the Annual Report;

●

Whereas

, the Board has reviewed the Reports and intends with this Board Consent to give to Mr. Wojciech Wronowski and

Mr. Marek Chwałek, each individually, authorization to issue and execute the Reports on behalf of the Company.

●

Now, Therefore,

it being in the best interest of the Corporation, it is hereby:

●

Resolved

, that the Reports substantially in the form attached herein as Exhibit A to this Board Consent are hereby

approved and Mr. Wojciech Wronowski and Mr. Marek Chwałek, each individually, is authorized to issue and execute the

Reports on behalf of the Company as the Company’s representative;

●

Resolved further

, that Mr. Anton Gauffin is authorized to execute on behalf of the Company certain representations being

part of the Annual Report as set forth in the form attached herein as Exhibit A to this Board Consent, but with such

changes and additions as Mr. Anton Gauffin may deem to be in the best interests of the Company (such determination

that a change or addition is in the best interests of the Company to be conclusively evidenced by Mr. Anton Gauffin’s

execution of the modification, provided that notice is provided to the Board of any changes to the representations that

deviate from Exhibit A in a reasonable time after the representations have been executed);

●

Resolved further

, that Mr. Wojciech Wronowski and Mr. Marek Chwałek, each individually, is authorized to execute on

behalf of the Company the Reports substantially in the form attached herein as Exhibit A to this Board Consent, but with

such changes and additions as Mr. Wojciech Wronowski or Mr. Marek Chwałek may deem to be in the best interests of

the Company (such determination that a change or addition is in the best interests of the Company to be conclusively

evidenced by Mr. Wojciech Wronowski’s or Mr. Marek Chwałek’s or his or their designee’s execution of the modification,

provided that notice is provided to the Board of any changes to the Reports that deviate from Exhibit A in a reasonable

time after the Reports have been executed);

●

Resolved further

, that Mr. Wojciech Wronowski and Mr. Marek Chwałek, each individually, or their designee, as an

authorized representative of the Company, is individually further authorized and directed to file the Reports, with all

exhibits thereto, and other documents in connection therewith, with the Polish Financial Supervision Authority (Komisja

Nadzoru Finansowego) and to take all such further actions and to execute and deliver all such instruments and

documents in the name and on behalf of the Company, and under corporate seal or otherwise, as in the individual’s

judgment shall be necessary, proper, or advisable in order to fully carry out the intent and to accomplish the purposes of

the foregoing resolutions; and

●

Finally resolved

, that any and all actions of Mr. Wojciech Wronowski and Mr. Marek Chwałek and any of his agents or

designees pursuant to, or in furtherance of the intent and purposes of the foregoing resolutions, including prior to the date

of the foregoing resolutions adopted hereby that are within the authority conferred thereby are hereby ratified, confirmed

and approved as the acts and deeds of the Company.

The undersigned constituting all of the members of the Board do hereby consent to and approve the adoption of the foregoing

resolutions effective as of the date first written above. This consent may be executed in any number of counterparts, each of

which shall be deemed an original and all of which together shall constitute one instrument. This consent may be executed by

way of either digital or electronic signatures.

Board Of Directors

Anton Gauffin

Henric Suuronen

John Salter

Krzysztof Kaczmarczyk

Tom Jacobsson

Huuuge, Inc.

Annual Report for the twelve-month period ended December 31, 2023

This version is a pdf of the executed xHTML Annual Report for the 12-month period ended December 31, 2023. In case of any

discrepancies xHTML version shall prevail.

71

HUUUGE, INC.

850 New Burton Rd.,

Suite #201,

Dover, DE 19904

United States of America

CONTACT FOR INVESTORS

ir@huuugegames.com

https://ir.huuugegames.com

http://huuugegames.com