Huuuge, Inc.

HUUUGE, INC.

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

Table of contents

Company’s separate statement of comprehensive income

Company’s separate statement of ﬁnancial position

Company’s separate statement of changes in equity

Company’s separate statement of cash ﬂows

1. General information

2. Accounting policies

1) Basis for preparation of the ﬁnancial statements

2) Key judgements and estimates

3) Material accounting policies

4) Adoption of new and revised Standards

5) Determination of fair values

3. Revenue and dividend income

4. Segment information

5. Operating expenses

6. Finance income

7. Income tax

8. Investments in subsidiaries

9. Financial risk management

10. Accounting classiﬁcations of ﬁnancial instruments and fair values

11. Trade and other receivables

12. Cash and cash equivalents

13. Share capital

14. Share-based payment arrangements

15. Trade and other payables

16. Contingencies

17. Pledges and collaterals

18. Related party transactions

19. Transactions with management of the Company

20. Audit fees

21. Employment structure

22. Subsequent events

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

Company’s separate statement of comprehensive income

Note

Year ended

December 31, 2023

Year ended

December 31, 2022

Revenue

1,577

2,922

Cost of sales

Gross proﬁt/(loss)

1,577

2,922

Sales and marketing expenses

(56)

(76)

Research and development expenses

(419)

(2,156)

General and administrative expenses

(6,015)

(8,167)

Dividend income

159,729

Other operating income/(expense), net

(1,876)

(16)

Operating result

152,940

(7,493)

Finance income

2,869

986

Finance expense

(376)

Proﬁt/(loss) before tax

155,809

(6,883)

Income tax

(1,558)

(829)

Net result for the year

154,251

(7,712)

Other comprehensive income

Total comprehensive income/(loss) for the year

154,251

(7,712)

The accompanying notes are an integral part of these separate ﬁnancial statements.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

Company’s separate statement of ﬁnancial position

Note

As at December 31, 2023

As at December 31, 2022

Assets

Non-current assets

Investment in subsidiaries

29,847

29,162

Deferred tax assets

112

Property, plant and equipment

Right-of-use asset

Other long-term non-ﬁnancial assets

Total non-current assets

29,935

29,446

Current assets

Dividend receivable

10,000

Trade and other receivables

1,961

1,224

Corporate income tax receivable

752

Other short-term non-ﬁnancial assets

Cash and cash equivalents

80,532

86,210

Total current assets

93,245

87,440

Total assets

123,180

116,886

Equity

Share capital

Treasury shares

(16,652)

(20,942)

Supplementary capital

149,590

304,487

Employee beneﬁt reserve

25,749

22,894

Retained earnings/(Accumulated losses)

(39,502)

(193,753)

Total equity

119,186

112,688

Current liabilities

Trade and other payables

2,294

4,092

Provisions

1,700

Corporate income tax payable

Short-term lease liabilities

Total current liabilities

3,994

4,198

Total equity and liabilities

123,180

116,886

The accompanying notes are an integral part of these separate ﬁnancial statements.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

Company’s separate statement of changes in equity

Note

capital**

Treasury shares

Supplementary

capital

Employee beneﬁt

reserve

Retained earnings/

(accumulated losses)

Equity

As at January 1, 2023

(20,942)

304,487

22,894

(193,753)

112,688

Net proﬁt/(loss)

154,251

Total comprehensive income for the year

154,251

Exercise of stock options

13,14

4,290

(3,820)

470

Employee share schemes - value of employee services

2,855

Share BuyBack (“SBB”) - repurchase of shares *

(1)

(150,000)

(150,001)

Transaction costs related to SBB program *

(1,077)

Retirement of shares purchased during the Share Buyback

Scheme ("SBB")

151,077

(151,077)

As at December 31, 2023

(16,652)

149,590

25,749

(39,502)

119,186

* Share Buyback program (“SBB”) line includes the cash outﬂows for the repurchase of 17,121,919 own shares at a price of USD 8.7607 per share on July 4,2023. The change of trade and other

payables presented in the statement of ﬁnancial position as at December 31, 2023 does not equal the change in the statement of cash ﬂows for the year ended December 31, 2023. The difference of

USD 93 thousand is due to the transaction costs related to SBB, presented in the cash ﬂows from ﬁnancing activities in the statement of cash ﬂows, which were not paid as at December 31, 2023.

** (1) represents an amount less than USD 1 thousand.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

Note

capital**

Treasury shares

Supplementary

capital

Employee beneﬁt

reserve

Retained earnings/

(accumulated losses)

Equity

As at January 1, 2022

(19,954)

321,049

19,813

(186,041)

134,869

Net proﬁt/(loss)

(7,712)

Total comprehensive loss for the year

(7,712)

Shares issued/(repurchased) *

(20,090)

Exercise of stock options

13,14

18,791

(16,251)

2,540

Delivery of shares to former owners of Double Star Oy

13,14

311

(311)

Employee share schemes - value of employee services

3,081

As at December 31, 2022

(20,942)

304,487

22,894

(193,753)

112,688

* Shares issued/(repurchased) line includes payments for the purchase of 4,989,608 own shares under the buy-back program.

** 0 represents an amount less than USD 1 thousand.

The accompanying notes are an integral part of these separate ﬁnancial statements.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

Company’s separate statement of cash ﬂows

Note

Year ended

December 31, 2023

Year ended

December 31, 2022

Cash ﬂows from operating activities

Proﬁt/(loss) before tax

155,809

(6,883)

Adjustments for:

Non-cash employee beneﬁts expense – share-based payments

14,8

2,170

774

Finance (income)/expense, net

(2,805)

(1,051)

Depreciation and amortization

103

(Proﬁt)/loss on disposal of property, plant and equipment

Changes in net working capital:

Dividend receivable

(10,000)

Trade and other receivables

(737)

2,925

Trade and other payables

(1,891)

1,189

Other non-ﬁnancial assets

(30)

Provisions

1,700

Other adjustments

(4)

Cash ﬂows from operating activities

144,418

(2,977)

Income tax paid

(2,326)

(545)

Net cash ﬂows from/(used in) operating activities

142,092

(3,522)

Cash ﬂows from investing activities

Interest received

2,915

590

Acquisition of property, plant and equipment and intangible assets

(21)

Net cash ﬂows from investing activities

2,915

569

Cash ﬂows from ﬁnancing activities

Repurchase of own shares incl. transaction costs

(150,985)

(20,090)

Exercise of stock options

470

2,540

Lease repayment and interest paid

(60)

(78)

Net cash ﬂows from/(used in) ﬁnancing activities

(150,575)

(17,628)

Net increase/(decrease) in cash and cash equivalents

(5,568)

(20,581)

Effect of exchange rate ﬂuctuations and accrued interest

(110)

461

Cash and cash equivalents at the beginning of the year

86,210

106,330

Cash and cash equivalents at the end of the year

80,532

86,210

The accompanying notes are an integral part of these separate ﬁnancial statements.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

Notes to the separate ﬁnancial

statements

1. General information

Huuuge Inc. (hereinafter the “Company”, the “Parent Company”) is a company registered in the United States of America. The

Company’s registered oﬃce is located in Dover, Delaware, 850 Burton Road, Suite 201, DE 19904, and the operating oﬃce is

located in Las Vegas, Nevada, 2300 W. Sahara Ave., Suite 800, Mailbox #32, NV 89102.

The Company was established with a notary deed on February 11, 2015.

These separate ﬁnancial statements (hereinafter “ﬁnancial statements”) of the Company cover the year ended December 31,

2023 and includes comparative data for the year ended December 31, 2022.

These ﬁnancial statements were approved on

March 11 ,2024 by the Board of Directors.

The Company has an unlimited period of operation.

The core business activity of Huuuge Inc. is holding activity for the Huuuge Inc. Group (the “Group”), for which the Company is

the ultimate parent. The core business activities of the Group include:

●

development of mobile games in the free

to-play model,

●

distribution and user acquisition of own mobile games.

The Company’s business activities are not subject to signiﬁcant seasonal or cyclical trends. The Group’s business activities are

characterised by low environmental impact. For more information on climate matters, please refer to the Annual report for the

twelve-month period ended December 31, 2023. There were no signiﬁcant risks identiﬁed related to climate change.

Identiﬁcation of consolidated ﬁnancial statements

The Company is the ultimate parent of the Huuuge Inc Group. The Company has prepared consolidated ﬁnancial statements for

the year ended December 31, 2023, which were approved on March 11, 2024 by the Board of Directors.

Composition of the Company’s Board of Directors as at December 31, 2023 and as at the date of signing of these separate

ﬁnancial statements

Directors have annual terms of duty and serve until the successors are duly elected. Preferred shareholders have the right to

appoint certain directors.

As at December 31, 2022, the composition of the Company’s Board of Directors was the following:

●

Anton Gauﬃn, executive director, President, and co-CEO,

●

Rod Cousens, executive director, co-CEO,

●

Henric Suuronen, non-executive director,

●

Krzysztof Kaczmarczyk, non-executive director,

●

John Salter, non-executive director,

●

Tom Jacobsson, non-executive director.

Effective on March 7, 2023, Mr. Rod Cousens, co-CEO, and the Company reached a mutual agreement to end Mr. Cousens’s

executive service with the Company. Mr. Cousens remained a member of the Company’s Board of Directors. Effective on

September 18, 2023, the Board of Directors adopted a resolution on the following changes of the oﬃcers of the Company:

●

Mr Anton Gauﬃn stepped down from the position of President and Chief Executive Oﬃcer of the Company and was

appointed as the Executive Chairman of the Board while still remaining an executive director of the Company;

●

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;

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

●

Mr Erik Duindam, who was thus far serving as the Chief Technology Oﬃcer (not being a formal oﬃcer of the

Company), was appointed as a formal oﬃcer of the Company, namely the President, and the Chief Operating Oﬃcer;

●

Mr Marek Chwałek, who was serving as Executive Vice President of Finance (not being a formal oﬃcer of the

Company), was appointed as a formal oﬃcer of the Company, namely the Treasurer;

●

Ms Monika Kierepa was appointed as the Secretary.

Effective

October

27,

2023,

Mr. Krzysztof Kaczmarczyk and Mr. Tom Jacobsson were re-elected as independent

non-executive directors. In connection with the election of members of the Board of Directors by the Annual General Meeting,

Mr. John Salter was elected to serve as the Series A Director for the next term, and Mr. Henric Suuronen and Mr. Anton Gauﬃn to

serve as the Series B Directors for the next term.

After these changes, as at December 31, 2023 and as at the date of signing of these ﬁnancial statements, the composition of

the Company’s Board of Directors was the following:

●

Anton Gauﬃn, executive director, Executive Chairman of the Board,

●

Henric Suuronen, non-executive director,

●

Krzysztof Kaczmarczyk, non-executive director,

●

John Salter, non-executive director,

●

Tom Jacobsson, non-executive director.

Investments in subsidiaries

The Company has an interest in share capital of the following subsidiaries:

Name of entity

Registered seat

Activities

Company's share in capital

As at

December 31, 2023

As at

December 31, 2022

Huuuge Games Sp. z o.o.

Szczecin, Poland

games development and

operations

100%

Huuuge Global Ltd

Limassol, Cyprus

games distribution, user

acquisition

100%

Huuuge Publishing Ltd

(formerly Fun Monkey Ltd)

Limassol, Cyprus

games distribution

100%

Huuuge Block Ltd (formerly

Coffee Break Games Ltd)

Limassol, Cyprus

games distribution

100%

Billionaire Games Limited

Limassol, Cyprus

games distribution

100%

Huuuge Digital Ltd

Tel Aviv, Israel

games development, R&D

100%

Playable Platform B.V.

Amsterdam, Netherlands

games development, R&D

100%

Double Star Oy

Helsinki, Finland

games development

100%

Huuuge UK Ltd

London, United Kingdom

corporate development

100%

Huuuge Mobile Games Ltd

Dublin, Ireland

games distribution, user

acquisition, in liquidation

100%

Coffee Break Games

United Ltd *

Dublin, Ireland

games distribution, user

acquisition, in liquidation

100%

MDOK GmbH (formerly

Huuuge Pop GmbH)

Berlin, Germany

games development, in

liquidation

100%

Huuuge Labs GmbH

Berlin, Germany

games development, R&D,

in liquidation

100%

* Effective on January 24, 2024, Coffee Break Games United Ltd was dissolved and is no longer in existence.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

2. Accounting policies

Basis for preparation of the ﬁnancial statements

These ﬁnancial statements of the Company have been prepared in accordance with the International Financial Reporting

Standards as adopted by the European Union (“IFRS”) and constitute the Company’s separate ﬁnancial statement prepared in

order to meet the legal requirements imposed on issuers of the securities admitted to trading on regulated markets. The

Company has prepared the ﬁnancial statements on the basis that it will continue to operate as a going concern.

The Company is the parent entity of the Huuuge Inc. Group. The annual consolidated ﬁnancial statements of the Group have

been prepared in accordance with the requirements of IFRS. In order to fully understand the ﬁnancial situation and the results of

operations of the Company as the parent company in the Group, these ﬁnancial statements should be read together with the

annual consolidated ﬁnancial statements for the period ended on 31 December 2023. The consolidated ﬁnancial statements of

the Group are prepared and published at the same time as these separate ﬁnancial statements of the Company.

These ﬁnancial statements are prepared on the historical cost basis.

The functional currency of the Company and the presentation currency of these ﬁnancial statements is the US dollar (“USD”).

Key judgements and estimates

The preparation of ﬁnancial statements in accordance with IFRS requires management to make judgements, estimates and

assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and

expenses. Actual results may differ from those estimated. Estimates and underlying assumptions are reviewed on an ongoing

basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future

periods affected.

In preparing these ﬁnancial statements, the signiﬁcant judgements and estimates made by management in applying the

Company’s accounting policies have been consistently applied by the Company and are consistent across the reported periods.

Model of revenue recognition

Agent vs principal considerations – transactions between the Company and Huuuge Global Limited

The Company purchases certain advertisement services from third parties (mostly Platform providers such as Facebook),

which are subsequently recharged to Huuuge Global Ltd. The Company’s management has determined that in its relation to the

platforms the Company acts as an agent on behalf of Huuuge Global Ltd.

In accordance with IFRS 15.B34, when another entity is involved in providing goods or services to a customer, the entity

evaluates the nature of its promise to the customer, whether the nature of the entity`s performance obligation is to provide the

speciﬁed goods or services to the customer itself (in this case the entity is a principal) or to arrange for them to be provided by

another entity (in this case the entity is an agent). In accordance with IFRS 15.B35, the entity acts as the principal, if it obtains

control of the speciﬁed good or service before it is transferred to the customer, otherwise the entity acts as an agent arranging

for the provision of the speciﬁed goods or service for another entity`s customer. An agent recognizes revenue on a net basis

corresponding to any fee or commission to which it expects to be entitled in return for the arrangement of provision of goods or

services by another entity.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

The Company’s management assessed that, taking into account the IFRS 15 guidance, the nature of the Company’s

performance obligation is to ensure the provision of advertisement services by Platform providers such as Facebook for Huuuge

Global Ltd, and that the Company itself does not obtain control over the goods or services provided prior to its transfer to the

customer. The Company’s management therefore assessed that the Company acts as an agent to Huuuge Global Limited. The

conclusion that the Company acts as an agent is supported mainly by the following factors: Platform providers (such as

Facebook) have the ultimate responsibility for providing the services to Huuuge Global Ltd; the Company does not set the prices

for the advertisement services, nor it has a discretion to select the Platforms, Platform providers have right to change these

prices at any time at their discretion.

The Company being an agent presents revenues from those transactions in net amounts – revenue from Huuuge Global Ltd for

the provision of these services was fully netted with related costs in the statement of comprehensive income for the years

ended December 31, 2023 and December 31, 2022.

For details on the accounting policies related to the revenue recognition please refer to Note 2.3

Material accounting policies

point (b)

Revenue

Money market mutual funds

As part of its liquidity management, the Company engages in short-term deposits with various banks or overnight deposits in

money market mutual funds. The Company invests in money market funds that are open-ended mutual funds that invest in

liquid, high-quality debt. This debt is either issued or guaranteed by the U.S. government, its agencies, or instrumentalities, along

with repurchase agreements secured by such obligations or cash (Aaa-mf Moody’s rating of funds only). The main goals are the

preservation of principal, high liquidity and a modest incremental return over short-term interest rates or a benchmark rate.

Key judgment in applying accounting policies refers to the classiﬁcation of investments in money market mutual funds as “Cash

and cash equivalents” and not as “Other ﬁnancial assets”. The units of the funds held by the Company are short-term, highly

liquid, readily convertible to known amounts of cash and are subject to an insigniﬁcant risk of future changes in value, thus they

meet the critical criteria indicated in IAS 7

Statement of Cash Flows

and have been considered in substance as cash equivalents.

Investments in money market funds have a determinable market value and they are puttable, with a short notice period. The

Company can dispose the investments in funds at its discretion any time (same-day access), funds are not closed for a selected

group of participants. They are convertible into cash and the cash amount to be received on redemption is known at the time of

the investment because at the time of the initial investment, the risk of changes in value is insigniﬁcant. The volatility of changes

in fair value, in particular the credit and liquidity risk, is limited taking into account the level of diversiﬁcation of the portfolio and

its weighted average life of the underlying assets of the funds. The exposure to benchmark interest rate risk is also assessed to

be low because of a short period of time until the next repricing of the assets held by the fund to current benchmark interest

rates. These facts support the view that the investment is liquid.

In addition, the Company considered the assets held by the fund to establish whether substantially all of its investments qualify

individually as cash and cash equivalents. The consideration referred to all potential investments allowed by the investment

rules set for the fund, and not only the assets that the fund holds as of the evaluation date. It was assessed that in general the

investments’ maturity is less than three months and thus, investments qualify individually as cash and cash equivalents.

Due to the above, in the management’s opinion, the Company’s investments in money market funds have the attributes to be

considered a cash equivalent. This analysis is performed at each reporting period. For details on the funds and their credit

ratings please refer to Note 9

Financial risk management

, point (b)

Credit risk

. For carrying amounts as at December 31, 2023

and December 31, 2022 please refer to Note 12

Cash and cash equivalents

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

Estimation uncertainty

The assumptions made about the future and the major sources of estimation uncertainty refer to the following areas:

Deferred tax assets and liabilities, in particular the realizability of deferred tax assets

In order to determine deferred tax assets and deferred tax liabilities the management needs to make estimates and judgments,

especially in the valuation of deferred tax assets and liabilities. Signiﬁcant management estimate is required to determine the

amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable proﬁts,

together with future tax planning strategies. The process includes evaluation of the tax results of the Company, under

consideration of local tax laws and regulations, assessment of the actual tax exposure and of temporary differences as well as

assessment of the likelihood that deferred tax assets can be utilized in future periods through generation of taxable proﬁts.

The recognition of a deferred tax asset is based on the assumption that it will be recoverable against future taxable income. The

deterioration of tax results in the future could cause that this assumption could not be justiﬁed. When accounting for

transactions the Company takes into account uncertainties as to whether its treatment will be accepted by the tax authorities.

Estimates used for the recognition of deferred tax assets are updated annually with factors such as expected tax rates and

expected future tax results of the Company.

Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and tax bases of

investments in subsidiaries as the Company is able to control the timing of the reversal of the temporary differences and in the

management’s assessment it is probable that the differences will not reverse in the foreseeable future.

For more details on deferred tax assets and liabilities please refer to Note 2.3

Material accounting policies

, point (c)

Income tax

and to Note 7

Income tax

Provisions and contingent liabilities

Determination of provisions and contingent liabilities is based on management’s assessment of the probability of the outﬂow of

resources embodying economic beneﬁts, according to guidelines included in IAS 37

Provisions, Contingent Liabilities and

Contingent Assets

Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the end of the

reporting period and are discounted to present value where the effect is material.

The Company has become involved in several pending litigations. In each instance, the Management considered the potential

outcome of the matter and assessed its impact on these ﬁnancial statements, including deliberation on whether provisions

should be recognized and, if so, the appropriate quantiﬁcation thereof. For more details on the Company's litigations please refer

to Note 16

Contingencies

Material accounting policies

The accounting policies applied by the Company in these ﬁnancial statements have been consistently applied by the Company

and are consistent across the reported periods, unless indicated otherwise.

Foreign currency transactions – transactions and balances

Transactions in foreign currencies are translated to USD (which is the functional currency of the entity and the presentation

currency of these ﬁnancial statements) at exchange rates effective on the days of the transactions. Monetary assets and

liabilities denominated in foreign currencies are translated into USD at the applicable closing exchange rates as of the balance

sheet date. The foreign exchange rate differences arising on translation of transactions denominated in foreign currencies are

recognized in the proﬁt or loss in the statement of comprehensive income.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

Non-monetary assets and liabilities that are measured at historical cost in foreign currency are translated using the exchange

rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair

value are translated at the exchange rates at the date the fair value was determined. Translation differences on assets and

liabilities carried at fair value are reported as part of the fair value gain or loss.

Revenue

The Company’s revenue is generated by services provided to the other entities in the Group. The Company’s revenue comprises

revenues from advertisement services, game design development services, and stewardship activities.

Advertisement services

The Company purchases certain advertisement services from third parties (mostly Platform providers such as Facebook), which

are subsequently recharged to Huuuge Global Ltd. The Company’s management has determined that in its relation to the

platforms the Company acts as an agent on behalf of Huuuge Global Ltd. Further information on the judgment in this respect is

presented in Note 2.2

Key judgements and estimates – Model of revenue recognition.

The Company’s management identiﬁed one performance obligation which is advertisement services in gaming applications.

Revenue is recognized over time, in the period in which services are provided.

Game design development services, and stewardship activities

Under each of these revenue streams, The Company’s management identiﬁed one performance obligation. Revenue is

recognized over time, in the period in which services are provided. For game design development services, legal services and

stewardship activities, the Company has a right to consideration in an amount that corresponds directly with the value to the

customer of the entity’s performance completed to date.

Management assesses that the Company does not have any contracts where the period between the transfer of the promised

goods or services and payment exceeds one year. As a consequence, the Company does not adjust any of the transaction prices

for the time value of money. A receivable is recognized when the consideration is unconditional because only the passage of

time is required before the payment is due.

In relation to these services, the Company’s management has determined that the Company acts as the principal as it controls

the speciﬁed good or service before it is transferred to the customer. In such circumstances, the Company recognizes revenue

in the amount of gross remuneration to which it expects to be entitled in exchange for the goods or services transferred.

Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in proﬁt or loss except to

the extent that it relates to a business combination, or items are recognized directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or

substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences arising between the tax bases of assets and liabilities and their

carrying amounts in the ﬁnancial statements. Deferred tax is not recognized for temporary differences arising on the initial

recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor

taxable proﬁt or loss. Deferred tax liabilities and assets are not recognized for temporary differences between the carrying

amount and tax bases of investments in subsidiaries where the company is able to control the timing of the reversal of the

temporary differences and it is probable that the differences will not reverse in the foreseeable future. In addition, deferred tax is

not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the

tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been

enacted or substantively enacted by the reporting date.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities, and

they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they

intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

Huuuge, Inc. is subject to U.S. tax regulations on the global intangible low-taxed income (GILTI) that are applicable to U.S.

taxpayers since 2017. The GILTI is a category of income that is earned abroad by U.S.-controlled foreign corporations from

easily movable intangible assets, such as IP rights, and this income is subject to special tax treatment under the U.S. tax code.

The Company applies the accounting policy to treat U.S. taxes due in relation to GILTI as a current-period expense when

incurred. Therefore, the Company does not record the deferred taxes for basis differences expected to reverse as GILTI in future

periods.

In addition, starting from 2022, in the United States, Tax Cuts and Jobs Act requires capitalization and amortization of research

& development expenses for U.S. federal income tax purposes. As the Company does not capitalize any research or

development expenditures for the accounting purpose, this might give a rise to the deductible temporary differences related to

the R&D expenses. As Huuuge Inc. does not carry out any R&D operations in the US, the deductible temporary differences do not

arise in this area, and the deferred tax asset is not recognized.

However, the tax capitalization rules apply also to R&D expenses incurred in the foreign operations when the income is being

computed or reported on a U.S. tax basis. The deferral of R&D expenses for tax purposes affects the computation of GILTI that

is accounted for in accordance with the accounting policy indicated above.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is

probable that future taxable proﬁts will be available against which they can be utilized.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent it is no longer probable that the related tax

beneﬁt will be realized.

Shares in subsidiaries, associates and joint ventures

Shares in subsidiaries, associates and joint ventures not classiﬁed as held for sale in accordance with IFRS 5, are measured at

historical cost in accordance with IAS 27 reduced by impairment losses, if any arise in accordance with IAS 36. The impairment

test is carried out if there are any indications of impairment. The amount of the impairment loss is assessed by comparing the

carrying amount to the higher of fair value less costs to sell and value in use. Usually, transaction costs related to acquisition of

shares in subsidiaries increase the costs (the carrying amount) of the investment.

Subsidiaries are entities controlled by the Company.

The Company controls an entity when it:

●

has power to direct the relevant activities of the investees that signiﬁcantly affect their returns,

●

has exposure, or rights, to variable returns from its involvement with the investees,

●

has the ability to use its power over the investees to affect the amount of the investor’s returns.

The Company veriﬁes if it has control over entities, if an event results in a change to one or more of the control conditions listed

above.

The Company does not have any associates or/and joint ventures.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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Financial instruments

The Company recognizes the non-derivative ﬁnancial instruments such as, trade and other receivables, cash and cash

equivalents (including investments in mutual funds) and trade and other payables.

At initial recognition, the Company measures a ﬁnancial asset at its fair value plus, in the case of a ﬁnancial asset not at fair

value through proﬁt or loss (“FVPL”), transaction costs that are directly attributable to the acquisition of the ﬁnancial asset.

Transaction costs of ﬁnancial assets carried at FVPL are expensed in proﬁt or loss.

The Company classiﬁes its ﬁnancial assets to the measurement category: debt instruments to be measured at amortized cost.

The classiﬁcation depends on the entity’s business model for managing the ﬁnancial assets and the contractual terms of the

cash ﬂows. Assets that are held for collection of contractual cash ﬂows, where those cash ﬂows represent solely payments of

principal and interest (“SPPI test”), are measured at amortized cost. Interest income from these ﬁnancial assets is included in

ﬁnance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in proﬁt

or loss.

Management assesses the Company’s expected credit losses (“ECLs”) associated with debt instruments measured at

amortized cost, regardless of whether or not there has been any indication of impairment. Please refer to Note 2.3

Material

accounting policies

, point (f)

Impairment, (i) Financial assets

below.

Impairment

(i)

Financial assets

Management assesses the Company’s ECLs associated with debt instruments measured at amortized cost, regardless of

whether or not there has been any indication of impairment.

For trade receivables, the Company applies a simpliﬁed approach and measures a loss allowance for expected credit losses at

the amount equal to the expected credit losses over the instrument's lifetime. The Company uses its historical data on credit

losses, adjusted on an as-needed basis for the impact of forward-looking statements.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances, call deposits and highly liquid investments (including money market funds)

with maturities at initial recognition of three months or less.

The judgment relating to the classiﬁcation of the investments in money market funds as “cash and cash equivalents’ is

disclosed in Note 2.2

Key judgements and estimates – Money market mutual funds

Cash on bank accounts and investments in money market mutual funds meets the SPPI test and the business model test "held

to collect", therefore they are measured at amortized cost including an impairment loss determined in accordance with the

expected loss model described in Note 2.3

Material accounting policies

, point (f)

Impairment, (i) Financial assets

Trade and other receivables

Trade receivables are recognized initially at the fair value which is equal to the nominal amount when the contract does not

contain signiﬁcant ﬁnancing. Subsequently, they are carried at amortized cost using the effective interest method, less loss

allowance. The loss allowance is determined according to the accounting policy presented in Note 2.3

Material accounting

policies

, point (f)

Impairment, (i) Financial assets

Other receivables include tax receivables other than from corporate income taxes and advance payments for subscriptions.

Other receivables that are not ﬁnancial assets as at the end of the reporting period are measured at the amount due.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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Trade and other payables

These amounts represent liabilities for goods and services provided to the group prior to the end of the ﬁnancial year which are

unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the

reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the

effective interest method.

The other payables comprise employees-related liabilities, tax other than income tax liabilities, and accrued expenses, which are

measured at the amount due.

Share capital and other components of the equity

Share capital is presented at the total nominal value of the registered shares of the Company.

As at December 31, 2023 and December 31, 2022 all ordinary shares and preferred shares (series A and B) are classiﬁed as

equity. Preferences attributable to series A and B of preferred shares are described in Note 13

Share capital

Incremental costs directly attributable to the issue of new shares are presented as the deduction of equity, i.e. supplementary

capital. Qualifying transaction costs incurred in anticipation of an issuance of equity instruments are also deducted from the

equity, i.e. supplementary capital. If the equity instruments are not subsequently issued, the transaction costs are recognized as

an expense.

Any excess of the fair value of consideration received over the nominal value of shares issued is recorded as share premium in

equity, i.e. supplementary capital.

In the line “Treasury shares”, the Company presents the own shares repurchased, which are recognized at costs and are

deducted from equity. No gain or loss is recognized in proﬁt or loss on the purchase, sale, issue or cancellation of the Company

shares. Any difference between the carrying amount and the consideration, if reissued, is recognized in the supplementary

capital. Incremental costs directly attributable to the repurchase of own shares are presented as the deduction of equity, i.e. in

the line “Treasury shares”.

In accordance with Delaware General Corporation Law, the Company may declare and pay dividends upon the shares of its

capital stock either:

Out of its surplus, being the excess of its net assets over its capital (all or part of the consideration received by the

corporation in exchange for its capital stock, as determined by the Board of Directors); or

In case there shall be no such surplus, out of its net proﬁts for the ﬁscal year in which the dividend is declared and/or

the preceding ﬁscal year.

If the capital, as deﬁned above, shall have been diminished by depreciation in the value of its property, or by losses, or otherwise,

to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes

having a preference upon the distribution of assets, the directors of such company shall not declare and pay out of such net

proﬁts any dividends upon any shares of any classes of its capital stock until the deﬁciency in the amount of capital represented

by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired.

Employee beneﬁts reserve results from the share-based payment arrangements and are described in detail in Note 2.3

Material

accounting policies

, (k)

Share-based payment arrangements

and Note 14

Share-based payment arrangements

. Employee beneﬁt

reserve is not transferred or reclassiﬁed within equity.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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Share-based payment arrangements

The Company runs an award program where the employees and contractors are receiving free options which entitle them to

purchase the shares in the Company. Such a program is a share-based payment program which is classiﬁed as equity settled

due to the fact that the Company does not have an obligation to settle the obligation arising under the program by delivering

cash to the employees or contractors.

Equity-settled share-based payments to employees of the Company and its subsidiaries and others providing similar services

are measured at the fair value of the equity instruments at the grant date. The grant date fair value of the awards is determined

using a share option pricing model.

Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 14

Share-based payment arrangements

Options with the same grant date but with different periods during which all the speciﬁed vesting conditions of a share-based

payment arrangement are to be satisﬁed are treated as separate awards with a different vesting period (staged vesting).

The fair value determined at the grant date of the equity-settled share-based payments is expensed (options granted to

employees of the Company) or allocated to investments in subsidiaries (options granted to employees of the Company’s

subsidiaries) over the vesting period. The amount recognized as an expense or allocated to investment in subsidiaries is

adjusted to reﬂect the number of awards for which the related service and non-market performance conditions are expected to

be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and

non-market performance conditions at the vesting date. At the end of each period the Company revises its estimate of the

number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in proﬁt

or loss, or investment in subsidiaries, such that the cumulative expense reﬂects the revised estimate, with a corresponding

adjustment to the equity-settled employee beneﬁt reserve.

IFRS 2

Share-based Payment

does not address whether an increase in equity recognized in connection with a share-based

payment transaction should be presented in a separate component within equity or within retained earnings. Such an increase is

presented in the line “Employee beneﬁt reserve” in these ﬁnancial statements, left for the disposition of the general shareholders

meeting.

Share - based payment transactions with non-employees (Advisory agreement as described in the Note 14

Share-based payment

arrangements

to these ﬁnancial statements)

Share-based payment transactions with non-employees include the transactions in which non-employees provide services to the

Company in exchange for free options which entitle them to purchase the shares in the Company.

In accordance with IFRS 2, the Company measures the services received, and the corresponding increase in equity, directly, at

the fair value of the goods or services received, unless that fair value cannot be estimated reliably. If the fair value of the

services received cannot be estimated reliably, the Company measures their value, and the corresponding increase in equity,

indirectly, by reference to the fair value of the equity instruments granted (indirect method).

Since the service is received on more than one date, the fair value of the equity instruments granted should be measured on

each date when the services are received. The Company measures expense to be recognised in the proﬁt on a quarterly basis

using the average share price, as the changes in the share price over that period are not signiﬁcant.

The Company recognizes the expense charge in the Company’s separate statement of comprehensive income over the vesting

period for which the related services are provided with the corresponding increase in equity in the line “Employee beneﬁt

reserve”.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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Other employee beneﬁts

Short-term employee beneﬁt obligations are measured on an undiscounted basis and are expensed as the related service is

provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or proﬁt-sharing plans if the

Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee,

and the obligation can be estimated reliably.

Provisions

A provision is recognized when the Company, as a result of a past event, has a present obligation (legal or constructive) that can

be estimated reliably and it is probable that the Company will be required to settle that obligation (an outﬂow of economic

beneﬁts will be required). Provisions are measured at management’s best estimate of the expenditure required to settle the

obligation at the end of the reporting period and are discounted to present value where the effect is material. For more details

on the Company's litigations please refer to Note 16

Contingencies

Research and development expenses

In the position “Research and development expenses”, the Company recognizes costs related to game design of the existing

and the new games.

Sales and marketing expenses

In the position “Sales and marketing expenses”, the Company recognizes mostly costs of remuneration.

Finance income and expense

Foreign currency gains and losses are reported on a net basis as either ﬁnance income or ﬁnance cost depending on whether

foreign currency movements are in a net gain or net loss position unless material, where separate presentation is required.

Finance income comprises mainly interest income on funds invested. Interest income is recognized as it accrues in proﬁt or

loss, using the effective interest method.

Finance expenses comprise interest expenses from banks and leases.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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Adoption of new and revised Standards

The EU IFRS include all International Accounting Standards, International Financial Reporting Standards and Interpretations as

approved by the European Union. As at the date of approving these ﬁnancial statements for publication, considering the pending

process of introducing IFRSs in the EU and the operations conducted by the Company, the EU IFRS applicable to these ﬁnancial

statements might differ from IFRS adopted by the International Accounting Standards Board.

In preparing these ﬁnancial statements the Company’s management has analyzed new Standards which have already been

adopted by the European Union and which should be applied for periods beginning on or after January 1, 2023.

New International Financial Reporting Standards and Interpretations published but not yet effective:

●

Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets Between an Investor and its Associate or Joint

Venture (issued on September 11, 2014): the endorsement process of these Amendments has been postponed by the

EU – the effective date was deferred indeﬁnitely by the International Accounting Standards Board;

●

Amendments to IAS 1: Presentation of Financial Statements: Classiﬁcation of Liabilities as Current or Non-current –

Deferral of Effective Date and Non-current Liabilities with Covenants ( issued on January 23, 2020 and subsequently

amended on July 15, 2020 and October 31, 2022): effective for ﬁnancial years beginning on or after January 1, 2024;

●

Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback (issued on September 22, 2022): effective for

ﬁnancial years beginning on or after January 1, 2024;

●

Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance

Arrangements (Issued on May 25, 2023): not yet endorsed by the EU at the date of approval of these ﬁnancial

statements for issue – effective for ﬁnancial years beginning on or after January 1, 2024;

●

Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (issued on August

15, 2023): not yet endorsed by the EU at the date of approval of these ﬁnancial statements for issue – effective for

ﬁnancial years beginning on or after January 1, 2025.

These standards and amendments are not expected to have a material impact on the Company in the current or future reporting

periods and on foreseeable future transactions.

New International Financial Reporting Standards and Interpretations effective for the ﬁrst time for ﬁnancial year 2023:

During the year 2023, the following IFRS and amendments to IFRS or interpretations entered into force:

●

IFRS 17: Insurance Contracts (issued on 18 May 2017): effective for annual periods beginning on or after 1 January

2023;

●

Amendments to IFRS 17 and an amendment to IFRS 4 (issued on 25 June 2020): effective for annual periods

beginning on or after 1 January 2023;

●

Transition option to insurers applying IFRS 17 – Amendments to IFRS 17 (issued on 9 December 2021): effective for

annual periods beginning on or after 1 January 2023;

●

Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting policies (issued on 12 February 2021):

effective for annual periods beginning on or after 1 January 2023. These changes have been implemented and

reﬂected in these ﬁnancial statements.

●

Amendments to IAS 8: Deﬁnition of Accounting Estimates (issued on 12 February 2021): effective for annual periods

beginning on or after 1 January 2023);

●

Deferred tax related to assets and liabilities arising from a single transaction – Amendments to IAS 12 (issued on 7

May 2021): effective for annual periods beginning on or after 1 January 2023);

●

Amendments to IAS 12 Income taxes: International Tax Reform – Pillar Two Model Rules (issued 23 May 2023):

effective for annual periods beginning on or after 1 January 2023).

The amendments listed above did not have any impact on the amounts recognized in prior periods and are not expected to

signiﬁcantly affect the current or future periods.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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Determination of fair values

A number of the Company’s accounting policies and disclosures require the determination of fair value, for both ﬁnancial and

non-ﬁnancial assets and liabilities. As at December 31, 2023 and as at December 31, 2022 there were no assets or liabilities

measured at fair values.

At each reporting date, the management analyzes movements in the values of assets and liabilities which are required to be

remeasured or re-assessed as per the Company’s accounting policies.

Trade and other receivables measured at amortized cost

For trade and other receivables and deposits, the Company’s management considers their carrying amounts to be the best

estimates of fair values, due to the short-term nature and high liquidity of these instruments. This fair value is determined for

disclosure purposes.

Non-derivative ﬁnancial liabilities measured at amortized cost

For trade accounts payable, the Company’s management considers their carrying amounts to be the best estimation of their

respective fair values, determined for disclosure purposes, due to the short-term nature of these instruments. Fair value of

non-derivative ﬁnancial liabilities other than trade accounts payable, is calculated based on the present value of future principal

and interest cash ﬂows, discounted at the market rate of interest at the reporting date. For lease liabilities, an interest rate

implicit in the lease is used, if that rate can be readily determined; if that rate cannot be readily determined, the lessee's

incremental borrowing rate is used.

As of December 31, 2023 and December 31, 2022 the Company does not classify any assets or liabilities to be subsequently

measured at fair value.

3. Revenue and dividend income

The Company’s revenue is generated by services rendered to the other entities in the Group. The Company’s revenue comprises

revenues from stewardship activities as well as facilitating the advertisement services on behalf of Huuuge Global Ltd.. The

Company as an agent presents revenues from advertising services in net amounts, for further details on the judgment please

refer to Note 2.2

Key judgements and estimates - Model of revenue recognition.

During the year ended December 31, 2023 the Company’s revenues amounted to USD 1,577 thousand (USD 948 thousand from

game design services and USD 629 thousand from stewardship services), and in the year ended December 31, 2022 - USD 2,922

thousand (USD 2,724 thousand from game design services and USD 197 thousand from stewardship services).

During the year ended December 31, 2023, the Company recognized dividend income in the amount of USD 159,729 thousand as

presented in the line “Dividend income” in the separate statement of comprehensive income. The dividend was paid out of the

proﬁts for the years 2019, 2020, 2021 and 2022 of Huuuge Global Limited and proﬁts for the year 2023 of Huuuge Global

Limited and Huuuge Games Sp. z o.o.. As at December 31, 2023 there was an outstanding balance of USD 10,000 thousand

from Huuuge Global Ltd. The remaining USD 10,000 thousand was received on March 1, 2024.

4. Segment information

The Company uses the exemption with respect to the disclosures of segment information in accordance with IFRS 8.4,

therefore, the analysis of the activities of the Company's operating segments has been presented in the consolidated ﬁnancial

statements as at and for the year ended December 31, 2023.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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5. Operating expenses

For the years ended December 31, 2023 and December 31, 2022 operating expenses include:

Expenses by nature

Year ended

December 31, 2023

Year ended

December 31, 2022

Salaries and employee-related costs

3,056

3,757

Finance and legal services

2,767

5,390

Share-based payment expense

350

774

Other costs

317

478

Total operating expenses

6,490

10,399

Finance and legal services in the year ended December 31, 2023 include costs related to the review of the strategic options of

the Company in the amount of USD 530 thousand (USD 3,438 thousand in the year ended December 31, 2022).

6. Finance income

Year ended December 31, 2023

Year ended December 31, 2022

Interest earned from banks

2,805

986

Foreign exchange gains, net

Total ﬁnance income

2,869

986

Finance income for the year ended December 31, 2023 amounted to USD 2,869 thousand, which comprises mainly interest from

banks on deposits and money market mutual fund investments, including interest accrued in the amount of USD 286 thousand.

7. Income tax

As at December 31, 2023

As at December 31, 2022

Deferred tax assets

140

Deferred tax liabilities

(28)

Net deferred tax asset/(liability)

112

Year ended December 31, 2023

Year ended December 31, 2022

Current income tax

1,298

893

Adjustments in respect of current income tax of

previous year

236

Change in deferred income tax

(64)

Income tax for the year

1,558

829

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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The tax on the Company’s proﬁt before tax differs from the theoretical amount that would arise using the statutory tax rate

applied to its proﬁt as follows:

Effective tax rate reconciliation

Year ended

December 31, 2023

Year ended

December 31, 2022

Proﬁt/(loss) before income tax

155,809

(6,883)

Statutory tax rate in the United States

21%

Theoretical tax expense/(beneﬁt) according to current tax rate in

the United States

32,720

(1,445)

Previously taxed earnings - dividend from subsidiary

(33,543)

Tax impact of non-deductible costs – ESOP

163

GILTI* income net of FDII** deduction, net of foreign tax credit

2,085

2,128

Tax impact of non-deductible costs – other

(14)

(17)

Correction of the current tax relating to previous years

236

Tax charge

1,558

829

Effective tax rate

(12%)

* GILTI – Global Intangible Low-Taxed Income ** FDII – Foreign-Derived Intangible Income. This is a reconciling item since the

Company’s policy choice is to recognise any taxes for GILTI as a period cost, i.e. no deferred taxes for temporary differences

expected to reverse as GILTI. Please refer to the Note 2.3

Material accounting policies

The tax rate was higher in the year ended December 31, 2023 mainly due to the higher proﬁt before tax off-set by the lower

proportion of non-tax deductible costs in comparison to the prior period, as well as due to lower proportion of tax losses without

recognized tax beneﬁt.

Deferred tax reconciliation

Deferred tax assets

As at

December 31, 2023

As at

December 31, 2022

Accrued expenses

132

Lease liabilities

Unrealized exchange rate differences

(1)

(6)

Deferred tax assets

140

Compensation with deferred tax liabilities

(28)

Deferred tax asset presented in the statement of ﬁnancial position

112

Deferred tax assets are expected to be recovered within 12 months from the reporting date.

Deferred tax liabilities

As at

December 31, 2023

As at

December 31, 2022

Tangible assets

Right of use assets

Deferred tax liabilities

Compensation with deferred tax assets

(28)

Deferred tax liability presented in the statement of ﬁnancial position

Deferred tax liabilities expected to be settled within 12 months from the reporting date.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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Year ended

December 31, 2023

Year ended

December 31, 2022

Net deferred tax assets/(liabilities) at the beginning of the year

112

Net deferred tax assets/(liabilities) at the end of the year

112

Deferred tax assets/(liabilities) in the net proﬁt for the year

(64)

As at December 31, 2023 and December 31, 2022 there were no unused tax losses for which no deferred tax would be

recognized in the statement of ﬁnancial position.

8. Investments in subsidiaries

As at December 31, 2023

As at December 31, 2022

Huuuge Global Ltd

3,593

Huuuge Games Sp. z o.o.

2,326

Playable Platform B.V.

1,826

Huuuge UK

345

Huuuge Digital Ltd

0 **

Impairment

Options

granted

employees

the

Company’s

subsidiaries under stock option program *

21,757

21,072

Total investment in subsidiaries

29,847

29,162

* For details, please refer to the Note 14

Share-based payment arrangements

** 0 represents the amount less than USD 1 thousand

As at December 31, 2023 and December 31, 2022 there was no impairment of the investment in subsidiaries recognized due to

the lack of the impairment indicators. When reviewing the indicators of impairment, the Company’s management has

considered the following factors:

●

external sources, such as: observable indications that the assets’ value has declined signiﬁcantly more that would be

expected; signiﬁcant changes with an adverse effect in the technological, market, economic or legal environment;

market capitalization;

●

internal sources, such as: evidence of obsolescence or physical damage of the assets; evidence that economic

performance of the assets is or will be worse than expected; plans to discontinue or restructure the operation, plans to

dispose of the assets before than previously expected.

9. Financial risk management

Introduction

Risk management performed by the Company is aimed at reducing the impact of adverse factors on the ﬁnancial statements.

This note presents information about the Company’s exposure to speciﬁc risks arising from ﬁnancial instruments as well as the

Company’s objectives aimed at maintaining effective process for risk management.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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The Company is exposed in particular to the following risks arising from ﬁnancial instruments:

●

credit risk,

●

liquidity risk,

●

market risk.

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management

framework. The Board of Directors continually identiﬁes, evaluates and manages the risks faced by the Company, sets

appropriate risk limits and controls and monitors risks.

The Company’s management monitors ﬁnancial risks regarding the Group as a whole for the purpose of making risk

management related decisions.

Credit risk

Credit risk relating to cash and cash equivalents

The Company is exposed to credit risks mainly with regard to cash and cash equivalents, that include investments in money

market funds, which could arise if a counterparty becomes insolvent and accordingly is unable to return the deposited funds or

execute the obligations as a result of the insolvency. To mitigate this risk, wherever possible the Company’s management

conducts transactions and deposits funds with investment grade rated ﬁnancial institutions, as well as monitors and limits the

concentration of transactions with any single party. The Company’s management uses Moody’s credit ratings. The information

about the credit risk rating grades (applicable for the ﬁnancial institution group) is presented in the table below.

Moody's Rating

As at December 31, 2023

As at December 31, 2022

Aaa-mf

79,986

9,968

546

76,242

Total cash and cash equivalents

80,532

86,210

Cash and cash equivalents (including investments in money market mutual funds) are kept in ﬁnancial institutions with ratings

from Aaa to A3 , which are investment ratings according to Moody’s.

Cash and cash equivalents are kept at a limited number of major ﬁnancial institutions. The Company’s management monitors

the creditworthiness of the institutions and mitigates concentration risk by not limiting the exposure to a single ﬁnancial fund.

Concentration risk is mitigated by ensuring that the maximum concentration in any one ﬁnancial fund does not exceed 30%, at

the same time investment funds are diversiﬁed. In this way, the risk of concentration is spread among different funds rather than

within individual ﬁnancial institutions.

As at December 31, 2023, funds were held in one ﬁnancial institution but in several amounts of mutual funds. As at December

31, 2022, the concentration of funds in two ﬁnancial institutions was respectively 82.4% and 17.6%.

Total gross carrying amounts of cash and cash equivalents as of December 31, 2023 and December 31, 2022 were included in

Level 1, based on assessment that credit risk has not increased signiﬁcantly since initial recognition. For ﬁnancial assets in

Level 1, the Company recognizes 12 month ECL and recognizes interest income on a gross basis – interest will be calculated on

the gross carrying amount of the ﬁnancial asset before adjusting for ECL.

Management has assessed that the Company’s provision for expected credit losses related to cash and cash equivalents would

not be material in any of the periods presented.

The carrying amount of cash and cash equivalents balance represents the maximum credit exposure.

HUUUGE INC.

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Credit risk with respect to trade receivables and other receivables

The carrying amount of trade receivables represents the maximum credit exposure. The maximum exposure to credit risk at the

reporting dates was as follows:

Carrying amount

As at December 31, 2023

As at December 31, 2022

Trade receivables from related parties

1,734

1,100

Total

1,734

1,100

The Company’ trade receivables are trade receivables from related parties – mainly Huuuge Global Ltd. and Huuuge UK Ltd.

Transactions with related parties are described in Note 18

Related party transactions

Allowance for expected credit losses

The Company recognizes allowance for expected credit losses according to IFRS 9

Financial Instruments,

considering all

reasonable and supportive information (e.g. customer rating, historical recoverability).

The Company’s trade receivables are trade receivables from its related parties for each period presented therefore, the Company

does not apply the portfolio approach, and instead performs the analysis on the individual basis. Taking into account that

Company’s trade receivables are only from related parties and there were no issues with historical recoverability, the related

expected credit losses had been assessed as immaterial.

There are no trade receivables which are overdue more than 90 days or individually identiﬁed as impaired.

The ageing of trade

receivables at the reporting dates was as follows:

As at December 31, 2023

As at December 31, 2022

Total

not due

and

overdue

up to 1

month

over 1

month to

6 months

over 6

months

Total

not due

and

overdue

up to 1

month

over 1

month to

6 months

over 6

months

Trade

receivables from

related parties

1,734

1,100

Allowance for

expected credit

losses/

impairment

Trade

receivables, net

1,734

1,100

Liquidity risk

Liquidity risk means the risk that the Company may encounter diﬃculty in meeting the obligations associated with its ﬁnancial

liabilities that are settled by delivering cash or another ﬁnancial asset. The Company’s management approach to managing

liquidity is to ensure, as far as possible, that it will always have suﬃcient liquidity to meet its liabilities when due, under both

normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. Liquidity

risk is assessed in conjunction with the Company’s budgeted cash ﬂows and by managing a proper current liabilities structure.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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Unexpected business circumstances that may lead to deteriorating liquidity position are balanced with the demand for the

Company’s debt. The method of measuring the liquidity risk consists of the analysis of the cover of current liabilities with

available cash resources.

There are no bank loan balances and bank loan agreements in force as at December 31, 2023, December 31, 2022 and as at

date of approval these ﬁnancial statements for issue, thus also interest rate risk is remote from the Company’s perspective.

Moreover, it is not expected that the cash ﬂows included in the maturity analysis could occur signiﬁcantly earlier, or at

signiﬁcantly different amounts.

The following are the contractual maturities of ﬁnancial liabilities including estimated interest payments as of respective

balance sheet dates:

As at December 31, 2023

Carrying amount

Contractual cash

ﬂows

6 months or less

over 6 months

Trade payables

Accrued expenses (except taxes and

employee-related)

3,287

Lease liabilities

Non derivative ﬁnancial liabilities

3,377

As at December 31, 2022

Carrying amount

Contractual cash

ﬂows

6 months or less

over 6 months

Trade payables

107

Accrued expenses (except taxes and

employee-related)

2,614

Lease liabilities

Non derivative ﬁnancial liabilities

2,788

2,748

There were no derivative ﬁnancial instruments at the end of reported periods.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices may affect

the Company’s income or the value of the ﬁnancial instruments held (incl. money market mutual funds investments presented

as cash and cash equivalents). The objective of market risk management is to manage and control market risk exposures within

acceptable parameters, while optimizing the return. The Company does not apply hedge accounting in order to manage volatility

in proﬁt or loss and so far neither has entered into derivatives nor incurred external ﬁnancial liabilities.

(i)

Currency risk

Management of the Company has analyzed currency risk related to variability of exchange rates and did not identify signiﬁcant

balances of accounts denominated in foreign currencies (cash and cash equivalents, trade receivables and trade payables) and

transactions carried in foreign currencies which would be associated with a signiﬁcant currency risk for the Company.

HUUUGE INC.

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(all amounts in tables presented in thousand USD, except where stated otherwise)

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(ii)

Interest rate risk

As the Company has not entered in bank loan agreements in the presented periods till December 31, 2023, the interest rate risk

is marginal.

The Company does not have any signiﬁcant interest bearing liabilities at variable rate which would expose the Company to the

cash ﬂow risk.

The Company’s interest bearing assets are cash and cash equivalents. The deposits, and the investments in money market

funds are at a variable interest rate. These are investments which are either readily available, or with a short-term maturity date.

Since the expected reasonable shift of the interest rate is insigniﬁcant during the maturity period of the investments, proﬁt or

loss is not sensitive to the changes of interest rates. Therefore the interest bearing assets at variable rate do not expose the

Company to cash ﬂow risk.

Capital management

The Board of Directors manages the Company’s capital structure and makes adjustments in light of changes in economic

conditions.

The Board’s of Directors policy is to maintain a strong capital base so as to maintain investors’ and market conﬁdence and to

sustain future development of the business. The Company’s management seeks to maintain a suﬃcient capital base for

meeting the Company’s operational and strategic needs, with the objective to safeguard the ability to continue as a going

concern, settle the obligations and optimize the capital structure in order to reduce the cost of capital and maximize the return

on capital to the shareholders and maintain the level of capital that will ensure the settlement of liabilities. The amount of

capital maintained in each reporting period (see table below) met management’s objectives.

Managed capital consists of ordinary shares, preferred shares of series A and B, as well as repurchased own shares and options

as of December 31, 2023. For the amounts, please refer to Note 13

Share capital,

of these ﬁnancial statements. There are no

externally imposed capital management requirements (such as covenants or similar).

The Company’s management monitors the return on capital on the basis of the basic and diluted earnings per share ratios.

Further information on calculation of earnings per share rations is presented in the Group’s consolidated ﬁnancial statements.

The objective of the Management is to maximize the return on capital to the shareholders.

No dividends were declared and paid by the Company to its shareholders in the years ending December 31, 2023 and December

31, 2022.

As at December 31, 2023

As at December 31, 2022

Equity

119,186

112,688

Total capital

119,186

112,688

HUUUGE INC.

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10.

Accounting classiﬁcations of ﬁnancial instruments and fair values

The fair values of ﬁnancial assets and liabilities, together with the carrying amounts shown in the statement of ﬁnancial position are as follows:

As at December 31, 2023

Financial assets measured at

amortized cost

Financial liabilities at

amortized cost

Financial liabilities out of

scope of IFRS 9

Total carrying amount

Fair value

Assets

82,266

Trade receivables from related parties

1,734

Cash and cash equivalents

80,532

Liabilities

Lease liability

Trade payables

Net amount

82,266

82,176

As at December 31, 2022

Financial assets measured at

amortized cost

Financial liabilities at

amortized cost

Financial liabilities out of

scope of IFRS 9

Total carrying amount

Fair value

Assets

87,310

Trade receivables from related parties

1,100

Cash and cash equivalents

86,210

Liabilities

107

174

Lease liability

Trade payables

107

Net amount

87,310

107

87,136

As at December 31, 2023 and December 31, 2022 the Company’s management did not identify any ﬁnancial assets measured at fair value – neither through proﬁt or loss nor through other

comprehensive income.

The Company’s management believes that the fair values of ﬁnancial instruments do not differ signiﬁcantly from their carrying amounts.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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11.

Trade and other receivables

As at

December 31, 2023

As at

December 31, 2022

Trade receivables and accrued revenues from related parties

1,734

1,100

Other receivables

157

Prepaid expenses

Total trade and other receivables

1,961

1,224

Allowance for expected credit losses/ impairment of trade receivables is not signiﬁcant.

Transactions with related parties are described in Note 18

Related party transactions

Other receivables include tax receivables other than from corporate income taxes and advance payments for subscriptions.

Prepaid expenses include advance payments for services that will be received in the future. Main types of prepayments are:

subscriptions, expenses from cloud computing arrangements which do not include an intangible asset (software as a service

contracts), and administration costs.

12.

Cash and cash equivalents

As at

December 31, 2023

As at

December 31, 2022

Money market mutual funds

79,986

9,967

Cash at banks (current accounts)

546

1,053

Deposits

70,090

Money market interest-bearing accounts

5,100

Total cash and cash equivalents

80,532

86,210

Money market mutual fund investments are classiﬁed as cash equivalents. For the details, please refer to Note 2.2

Key

judgements and estimates

Maturity of these investments is three months, and they are repayable on demand, thus the investments are highly liquid, readily

convertible to known amounts of cash, and are subject to an insigniﬁcant risk of changes in value, and meet the criteria

indicated in IAS 7 Statement of Cash Flows, and have been considered in substance as cash equivalents.

During the year ended December 31, 2023, deposits and money market mutual fund investments generated interest income in

the total amount of USD 2,805 thousand. This includes the accrued interest from bank deposits in the amount of USD 286

thousand (received before the date of issue of these ﬁnancial statements). For the details, please refer to Note 6

Finance

income

As at December 31, 2023, there was restricted cash in the amount of USD 15 thousand (USD 15 thousand as at December 31,

2022).

As at December 31, 2022, there was a short-term cash deposit amounting to USD 70,090 thousand. Maturity of this investment

is three months, it is repayable on demand, thus the investment is highly liquid, readily convertible to known amounts of cash, is

subject to an insigniﬁcant risk of changes in value and meet the criteria indicated in IAS 7 Statement of Cash Flows and have

been considered in substance as cash equivalents.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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13.

Share capital

As at December 31, 2023 and December 31, 2022 Company's share capital comprised common shares and preferred shares series A and B. Below are presented movements on different

components of equity divided in the categories of shares (nominal values presented in USD, not thousand USD):

Shares classiﬁed as equity instruments as at December 31, 2023:

Common shares

(outstanding)

Preferred shares (series A

and B)

Treasury shares

Treasury shares allocated

for the existing

share-based payment

programs

Sub-total (issued)

Shares allocated for the

existing share-based

payment programs (not

issued)

Grand total

Number of

Nominal

value

Number of

Nominal

value

Number of

Nominal

value

Number of

Nominal

value

Number of

Nominal

value

Number of

Nominal

value

Number of

Nominal

value

As at January 1, 2023

79,183,513

1,584

5,063,182

102

84,246,697

1,686

11,007,733

220

95,254,430

1,906

Reduction of shares

allocated for the

existing share-based

payment programs (not

issued)

(915,554)

(18)

(915,554)

(18)

Allocation of shares to

Share-based payment

program

(915,554)

(18)

915,554

Exercise of stock

options

915,554

(915,554)

(18)

Share BuyBack (“SBB”)

- repurchase of shares

(17,121,919)

(342)

17,121,919

342

Retirement of shares

purchased during the

Share Buyback Scheme

("SBB")

(17,121,919)

(342)

(17,121,919)

(342)

(17,121,919)

(342)

As at December 31,

2023

62,977,148

1,260

4,147,628

67,124,778

1,344

10,092,179

202

77,216,957

1,546

HUUUGE INC.

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(all amounts in tables presented in thousand USD, except where stated otherwise)

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Shares classiﬁed as equity instruments as at December 31, 2022:

Common shares

(outstanding)

Preferred shares (series A

and B)

Treasury shares

allocated for the existing

share-based payment

programs

Sub-total (issued)

Shares allocated for the

existing share-based

payment programs (not

issued)

Grand total

Number of

Nominal

value

Number of

Nominal

value

Number of

Nominal

value

Number of

Nominal

value

Number of

Nominal

value

Number of

Nominal

value

Number of

Nominal

value

As at January 1, 2022

82,690,347

1,655

1,556,348

84,246,697

1,686

12,467,461

249

96,714,158

1,935

Reduction of shares

allocated for the

existing share-based

payment programs (not

issued)

(1,459,728)

(29)

(1,459,728)

(29)

Allocation of shares to

Share-based payment

program

(1,459,728)

(29)

1,459,728

Exercise of stock

options

1,459,728

(1,459,728)

(29)

Delivery of shares to

former owners of

Double Star Oy

23,046

(23,046)

(0)

Repurchase of

common shares under

Share Buyback Scheme

("SBB")

(4,989,608)

(100)

4,989,608

100

As at December 31,

2022

79,183,513

1,584

5,063,182

102

84,246,697

1,686

11,007,733

220

95,254,430

1,906

HUUUGE INC.

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(all amounts in tables presented in thousand USD, except where stated otherwise)

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The Company is authorized to issue up to 113,881,420 shares with a par value of USD 0.00002 (113,881,418 common shares

and 1 share of series A preferred share and 1 share of series B preferred share), out of which as at December 31, 2023,

21,295,567 shares were allocated to a reserve that could be issued only with majority shareholders’ approval (3,258,094 as at

December 31, 2022).

As at December 31, 2023, the share capital of the Company comprised 67,124,778 shares (fully paid) with a par value of USD

0.00002 per share and the total value of USD 1,344 (not thousands), including 62,977,148 common shares held by shareholders,

two preferred shares (one preferred share of series A and one preferred share of series B), and 4,147,628 common shares

reacquired by the Company and not redeemed (treasury shares and treasury shares allocated to the existing share-based

payment programs).

As at December 31, 2022, the share capital of the Company comprised 84,246,697 shares (fully paid) with a par value of USD

0.00002 per share and a total value of USD 1,686 (not thousands), including 79,183,513 common shares held by shareholders,

two preferred shares (one preferred share of series A and one preferred share of series B) and 5,063,182 common shares

reacquired by the Company and not redeemed (treasury shares and treasury shares allocated for the existing share-based

payment programs).

During the year 2023, the number of shares (not issued) allocated to the existing share-based payment programs was reduced

by 915,554 shares. This is because 915,554 treasury shares were delivered to employees for the options exercised during the

year ended December 31, 2023. As at December 31, 2023, 10,092,179 shares with a par value of USD 0.00002 per share were

reserved for two stock option programs established in 2015 and 2019.

During the year 2022, the number of shares (not issued) allocated to the existing share-based payment programs was reduced

by 1,459,728 shares. This is because 1,459,728 treasury shares were delivered to employees for the options exercised during the

year ended December 31, 2022.

As at December 31, 2022, 11,007,733 shares with a par value of USD 0.00002 per share were reserved for two stock option

programs established in 2015 and 2019.

Holders of the two series A and series B preferred shares, which may be converted for a ﬁxed number of common shares, have

several rights additional to the ones of the common shareholders, which may vary for series A and B). These rights are

stipulated in the corporate documents of Huuuge, Inc., in particular in the Fourth Amended and Restated Certiﬁcate of

Incorporation. Essentially, the rights refer to:

●

protective provisions in case of liquidation, dissolution, winding up, certain mergers, consolidations and sale of assets

of Huuuge, Inc. or conversion to common shares – the holders of series A or B preferred shares shall be entitled to be

paid out of the assets of the Company available for distribution to its shareholders before the holders of common

shares,

●

election of a director for every separate class of preferred shares, one per each series of preferred shares (series A,B);

two by the holders of common shares.

As at December 31, 2023 and December 31, 2022, no shareholder owned over 50% of the Company’s equity or had more than

50% of voting rights. The Company's major shareholder is Mr. Anton Gauﬃn, founder and Executive Chairman of the Board, who

participates in the Company’s ordinary shares indirectly (through shares of Big Bets OU).

The supplementary capital derives mainly from the difference between nominal value and the market price on issuance of

shares, or the difference between the book value and purchase price on re-issue of treasury shares.

HUUUGE INC.

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In the year ended December 31, 2023 the following transactions took place:

●

Delivery of the treasury shares for options exercised

In the year ended December 31, 2023, 1,693,330 share options held by employees under the share-based payment program were

exercised, out of which for 915,554 options exercised treasury shares were delivered to employees before December 31, 2023

(the difference is due to cashless exercises).

The delivery of treasury shares was presented as a movement from treasury shares to common shares. The movement resulted

in an increase in share capital in the amount of the nominal value of the shares delivered, and the difference between the value

of treasury shares and the cash consideration received in the amount of USD 3,820 thousand was recognized in supplementary

capital. At the same time, the movement decreased the number of shares (not issued) allocated to the existing share-based

payment programs.

●

Acquisition of shares under share Buyback Scheme ("SBB")

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 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 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 is 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.

Prior to the SBB settlement, the Company owned 4,314,211 common shares that representing 5.12% of the Company’s share

capital and did not entitle the Company to voting rights. Following the settlement of the SBB, the Company owns a total of

21,436,130 shares that represent 25.44% of the Company's share capital and do not entitle the Company to voting rights.

Consequently, following the settlement of the SBB, there were 84,246,697 shares of the Company issued and conferring

62,810,567 votes in total at the general meeting of the Company. The Company acquired the shares under the SBB with the

intention that the shares will be retired, other than those shares necessary, in the Company’s view, to satisfy its ongoing needs

under the Company’s employee stock option plans. Treatment of the acquired shares will be determined in due course by the

Issuer’s Board of Directors, in accordance with its Certiﬁcate of Incorporation.

●

Retirement of shares purchased by the Company during the share buyback

On August 29, 2023, the Company's Board of Directors in accordance with Section 243 of the Delaware General Corporation law,

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 (as announced in current report no 37/2023). The retirement is

effective as of the adoption of the resolution by the Board of Directors. The shares that were subject to the retirement were

purchased by the Company during the share buyback (current report no. 25/2023 dated July 4, 2023) with the intention that the

shares will be retired, other than those shares necessary, in the Company’s view, to satisfy its ongoing needs under the

Company’s employee stock option plans.

HUUUGE INC.

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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 shares of the Company. At the same time, the Company’s issued share capital decreased from

84,246,697 to 67,124,778 shares.

In the year ended December 31, 2022 the following transactions took place:

●

Share Buyback Scheme ("SBB")

On February 15, 2022, the Company decided to repurchase its common shares listed for trading on the Warsaw Stock Exchange.

The share buy-back started on March 29, 2022. The purpose of the Share Buyback Scheme was to satisfy the Company's needs

related to the exercise of options under its Employee Stock Option Plans in the foreseeable future. On May 22, 2022, the Board

of Directors adopted a resolution according to which the number of Company’s shares capable of being repurchased by the

Company under the SBB has been set to the 6,500,000 shares. On August 2, 2022, the Company indeﬁnitely suspended the

purchase of its own shares, and on May 30, 2023 this share buyback was terminated (announced by the Company on May 30,

2023 in the current report no. 19/2023).

The common shares repurchased were presented in treasury shares line in the statement of ﬁnancial position.

During the year ended December 31, 2022, 4,989,608 common shares were repurchased under the SBB program and were

registered at Central Securities Depository. Payments made for the purchase of own shares in the amount of USD 20,090

thousand were recognized in Equity (Treasury shares).

●

Delivery of the treasury shares for options exercised

In the year ended December 31, 2022, 2,072,355 share options held by the employees under the share-based payment program

were exercised, out of which for 1,459,728 options exercised treasury shares were delivered to employees before December 31,

2022 (the difference is due to cashless exercises).

The delivery of treasury shares was presented as a movement from treasury shares to common shares. The movement resulted

in an increase in share capital in the amount of nominal value of the shares delivered, and difference between the value of

treasury shares and the cash consideration received in the amount of USD 16,251 thousand was recognized in supplementary

capital. At the same time, the movement decreased the number of shares (not issued) allocated for the existing share-based

payment programs.

●

Delivery of the treasury shares to the former owners of Double Star Oy

In the year ended December 31, 2022, 23,046 shares were delivered to former owners of Double Star Oy based on the Share Sale

and Purchase Agreement, corrected by the First Amendment dated October 19, 2021. For details of the earn-out consideration,

please see Note 14

Share-based payment arrangements

. The movement resulted in an increase in share capital in the amount of

nominal value of the shares delivered, and a decrease in supplementary capital in the amount of USD 311 thousand (amount

reﬂects the value of treasury shares, since the shares were delivered with no cash consideration).

14.

Share-based payment arrangements

As at December 31, 2023 and as at December 31, 2022 the Company had an equity incentive plan, i.e. ESOP. The ﬁrst stock

option program (the employee stock option plan or “ESOP 2015”) was established by the Company’s Board of Directors on April

3, 2015, the second one on October 19, 2019 (“ESOP 2019”), the grant dates are determined at the dates when the contracts

with eligible employees are signed. The program entitles employees and consultants to purchase shares in the Company. Each

option stands for one common or treasury share of the Company.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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The vesting condition of both ESOP 2015 and 2019 programs is to provide the service continuously for at least 4 years from the

grant date and the following vesting schedule is applicable depending on the particular grant:

●

about

25%

the

options vest and become exercisable on a 12-month anniversary of the vesting

commencement date and then after end of each consecutive month 1/36 of the remaining shares options vest and

become exercisable; or

●

the options vest and become exercisable with respect to 1/48th of the total option shares when the optionee

completes each full month of continuous service after the grant date.

For such share-based payments staged vesting applies i.e. each instalment with different vesting period is treated as a separate

award with a different vesting period.

In addition, based on the ESOP 2019 plan, there were several grants with additional vesting conditions:

Executive Chairman of the Board options

Mr. Anton Gauﬃn, holding the positions of the Executive Chairman of the Board was granted 500,000 share options in total

during the year 2021, out of which 75,000 had a vesting condition to provide the service continuously for about four years from

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

condition was not met. All options can be exercised at a price of PLN 50, i.e., the price of the Company’s shares in the initial

public offering.

The vesting conditions for the options are the following:

●

50,000 options with a vesting condition to provide the service continuously for about four years from the service

commencement date. The Company’s management expects Mr. Anton Gauﬃn to fulﬁl the service condition.

●

375,000 options with a variable vesting period due to the market condition, i.e., condition to meet the Company’s

market capitalization milestones. The Company's management estimated that a total of six years of continuous

service from the service commencement date will be required for options to vest.

Similar to other share-based payments in the Company, for this program, staged vesting applies, i.e., each instalment has a

different vesting period and is treated as a separate award with a different vesting period.

Advisory agreement

Based on the contract executed on September 27, 2021, beginning from January 3, 2022 until October 31, 2024, the advisor shall

provide to the Company’s Executive Chairman of the Board consulting services for the consideration payable in options, i.e.,

options to purchase 206,250 shares in total vesting on a straight-line basis during the period of the agreement. This was

concluded to be a transaction with a non-employee, and the Company measures the fair value of the services received, and the

corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted when the services are

performed.

Options granted to key management personnel

Based on resolutions of the Board of Directors of Huuuge, Inc. 3,145,000 options were granted to key managers of Huuuge, Inc.

Group (incl. 2,345,000 options granted to Huuuge, Inc. Oﬃcers) on October 3, 2023. Additionally, 125,000 options were granted

on November 6, 2023.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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The vesting conditions for the 3,270,000 options in total are the following:

●

1,090,000 options with a vesting condition to provide the service continuously for about four years from the service

commencement date.

●

1,090,000 options with a vesting condition to provide the service continuously for about four years from the service

commencement date and to meet speciﬁed EBITDA and Revenue targets, i.e. performance condition.

●

1,090,000 options with a vesting condition to provide the service continuously and with a variable vesting period due

to market condition, i.e. condition to meet the Company’s market capitalization milestones.

Similar to other share-based payments in the Company, for this program, staged vesting applies, i.e., each instalment has a

different vesting period and is treated as a separate award with a different vesting period.

As at December 31, 2023 there were 10,092,179 shares reserved for the ESOP that were not yet allocated to speciﬁc employees

(11,007,733 as at December 31, 2022). This is at the Company discretion whether the unallocated shares will be allocated within

the share-based program to the employees or unused or withdrawn from the program.

In 2023 the Company’s Board of Directors granted 3,270,000 options (656,971 in 2022).

Details of the grants are presented in the table below:

Grant date

Number of instruments granted*

Expiry date

Granted in 2015

293,292

June 1, 2025

Granted in 2016

175,058

June 1, 2026 – December 1, 2026

Granted in 2017

386,310

February 1, 2027 – December 1, 2027

Granted in 2018

131,000

December 1, 2024

Granted in 2019

243,525

December 1, 2024 – November 6, 2025

Granted in 2020

738,024

April 1, 2027 – November 11, 2027

Granted in 2021

4,111,765

February 2,2028 – September 10, 2028

Granted in 2022

656,971

January 3, 2029 – August 5, 2029

October 3, 2023

3,145,000

October 3, 2030

November 6, 2023

125,000

November 6, 2030

Subtotal granted in 2023

3,270,000

Total

10,005,945

*Number of options granted before January 20, 2021 is presented in the amount before the share split on a one for ﬁve basis.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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Movements in share options during the period were as follows (weighted average exercise prices are presented in USD, not in

thousand USD):

Year ended December 31, 2023

Number of options

Weighted average exercise price

Balance as at January 1

4,778,100

4.46

Granted during the year

3,270,000

5.83

Forfeited during the year

(761,374)

3.95

Exercised during the year

(1,693,330)

3.13

Expired during the year

(58,980)

3.79

Balance as at December 31

5,534,416

5.75

Year ended December 31, 2022

Number of options

Weighted average exercise price *

Balance as at January 1

8,839,097

5.80

Granted during the year

656,971

3.99

Forfeited during the year

(2,345,282)

5.46

Exercised during the year

(2,072,355)

2.70

Expired during the year

(300,331)

5.56

Balance as at December 31

4,778,100

4.46*

* The weighted average exercise price of the balance outstanding as at December 31, 2022 includes the effect of modiﬁcation

which took place during the year ended December 31, 2022. The weighted average exercise price of the balance outstanding as

at January 1, 2022 is presented in the amount prior to the modiﬁcation.

As at December 31, 2023, 757,846 share options were exercisable, with the weighted average exercise price of USD 3.86 per

share. As at December 31, 2022, 1,585,019 share options were exercisable, with the weighted average exercise price of USD 3.1

per share.

The below table presents a summary of share prices at the exercise dates:

Exercise date

Grant date

Exercise price

Fair Market Value

on exercise date

Number of stock

options exercised

Exercised in 2020

May 29, 2015 – November

6, 2019

$0.0002 – $13.500

$15.0300 –

$18.6200

176,009

Exercised in 2021 (before

share split)

May 29, 2015 – December

1, 2016

$0.0002 – $0.79

$54.53

6,411

Exercised in 2021 (after

share split)

May 29, 2015 – November

20, 2020

$0.00004 –

$3.72402

$6.2348 –

$12.0319

1,851,622

Exercised in 2022

May 29, 2015 – January 3,

2022

$0.11 – $4.13

$3.5835 –

$5.6779

2,072,355

Exercised in 2023

May 29, 2015 – August 1,

2022

$0.00004 – $6.18

$5.31 – $7.02

1,693,330

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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For share options outstanding at the end of the reporting periods, the range of exercise prices and weighted-average remaining

contractual life was as follows:

As at December 31, 2023:

Exercise price in USD

Number of outstanding stock options

Weighted average remaining contractual

life (in years)

0.00004 - 0.83

127,754

3.88

2.7 - 3.92

1,448,483

4.65

4.13 - 13.51

3,958,179

6.40

Total:

5,534,416

5.89

As at December 31, 2022:

Exercise price in USD

Number of outstanding stock options

Weighted average remaining contractual life

(in years)

0.00004 - 0.83

268,694

4.21

2.7 - 3.92

3,448,626

5.58

4.13 - 13.51

1,060,780

6.15

Total:

4,778,100

5.63

The fair value of the employee share options without market conditions has been measured using the Black-Scholes formula by

an independent appraiser, assuming no dividends and using the valuation assumptions summarized below. The underlying price

of the common stock was determined using the fair value as of the option grant dates. The exercise prices of the options were

determined by the Board of Directors of the Company in the contract with the employee. The risk-free rate is based on the U.S.

Treasury yield curve in effect at the time of each grant date and corresponding to expiration. In assessing the appropriate time

to expiration, the appraiser examined the expiration period, the vesting period and the option grant dates.

The fair value of the employee share options with market conditions has been measured using the Binomial model by an

independent appraiser. This requires building a stock price tree as paths for the future stock prices to follow. The valuation is

done in the process of backward induction that allows to price US-type options and

ﬂexible adaptation of the model to the

speciﬁcs of the valued instrument. The model allows to take into account the term structure of interest rates and volatility,

enabling a variable dividend rate to be applied, modelling the vesting period and reﬂecting the conditions restricting the right to

exercise an option.

Based on the analysis and the factors speciﬁc to the Company, an equity volatility of 53.3%-80.0% (54.2%-80.0% for the year

ended December 31, 2022) was used in the option pricing model. Expected volatility was based on historical volatility of a

similar industry sector for the year ended December 31, 2022.

HUUUGE INC.

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(all amounts in tables presented in thousand USD, except where stated otherwise)

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The inputs used in the measurement of the fair values at the grant dates of the equity-settled share-based payment plan for the

options outstanding as of December 31, 2023 and as of December 31, 2022, were as follows:

As at

December 31, 2023

As at

December 31, 2022

Fair value at grant date

1.59 – 8.66

0.00002 – 8.66

Share price at grant date

2.50 – 10.91

2.5 – 10.91

Exercise price

0.83 – 13.5146

0.00004 – 13.5146

Expected volatility (weighted average)

53.29% – 80%

54.2% – 80%

Expected life (weighted average)

0.92 – 9.86

2.42-6.60

Risk-free interest rate

0.21% – 5.04%

0.21% – 3.27%

The effect of the fair value measurement is reﬂected in the proﬁt and loss against equity (USD 350 thousand was expensed in

2023 and USD 774 thousand in 2022). These costs were included in the “General and other administrative expenses” and

“Research and development expenses” lines in the statement of comprehensive income, booked against equity, “Employee

beneﬁt reserve”.

The effect of the fair value measurement of options granted to employees of the Company’s subsidiaries is recognised in the

Company’s assets as investment in subsidiaries in the amount of USD 685 thousand in 2023 (USD 2,307 thousand in 2022),

booked against equity, “Employee beneﬁt reserve”. Please refer to Note 8

Investment in subsidiaries.

During the year ended December 31, 2023, 1,693,330 options were exercised under the share-based payment program, and

915,554 treasury shares were delivered for all options exercised (the difference of 777,776 options is due to cashless

exercises). Total cash payments received during the year ending December 31, 2023 amounted to USD 470 thousand.

During the year ended December 31, 2022, 2,072,355 options were exercised in total under the share-based payment program,

and 1,459,728 treasury shares were delivered for all options exercised (the difference of 612,627 options is due to cashless

exercises). Cash payments received for the shares delivered to employees before December 31, 2022 amounted to USD 2,540

thousand.

Other than the share-based payment arrangements described above, as a result of the acquisition that took place on July 16,

2020, the Company accounted for the earn-out consideration payable in shares dependent on a performance condition and a

continuing employment condition as a share-based payment for the sellers of Double Star Oy. On February 21, 2022, 23,046

treasury shares were delivered to the former owners of Double Star Oy as presented in Note 13

Share capital

. No additional

shares, except for those delivered, would vest under earn-out consideration.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

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15.

Trade and other payables

As at

December 31, 2023

As at

December 31, 2022

Accrued expenses

2,142

3,918

Trade accounts payable including:

107

- trade accounts payable to third parties

- trade accounts payable to related parties

Tax payables other than from corporate income taxes

Other accounts payable

Trade and other payables

2,294

4,092

As at December 31, 2023 accrued expenses mainly included digital advertising related expenses, ﬁnance and legal services

expenses, expenses related to bonuses and remuneration and accrual audit services. As at December 31, 2022 accrued

expenses mainly included ﬁnance and legal services expenses (including the costs related to the review of the Company’s

strategic options), expenses related to bonuses and accrual for remuneration.

16.

Contingencies

Tax contingent liabilities

Tax settlements are subject to review and investigation by tax authorities, which are entitled to impose severe ﬁnes, penalties

and interest charges. Tax regulations in the United States have been changing recently, which may lead to lack of their clarity

and

integrity. Furthermore, frequent contradictions in tax interpretations, both within government bodies and between

companies and government bodies create uncertainties and conﬂicts.

Tax authorities may examine accounting records retrospectively: for 3 years in the United States (and up to 6 years in case of

substantial errors). Consequently, the Company may be subject to additional tax liabilities, which may arise as a result of tax

audits. The Board of Directors of the Company believes that there was no need to record any provisions for known and

quantiﬁable risks in this regard as in their assessment there are no such uncertain tax positions for which it would be probable

that the taxation authority will not accept the tax treatment applied by the Company.

Litigation and other legal proceedings

Company operates in a litigious environment. The Company and/or its subsidiaries have and may become involved in legal

proceedings, including litigation, arbitration and other claims, and investigations, inspections, audits, claims, inquiries and

similar actions. Legal proceedings, in general, can be expensive and disruptive. Some of these suits are class actions and/or

involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain

unresolved for several years.

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.

HUUUGE INC.

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(all amounts in tables presented in thousand USD, except where stated otherwise)

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The Company cannot predict with certainty the outcomes of any legal proceedings and other contingencies, and the costs

incurred in litigation can be substantial, regardless of the outcome. As a result, the Company and/or its subsidiaries could from

time to time incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and

such developments could harm our reputation and have a material adverse effect on our results of operations in the period in

which the amounts are accrued and/or our cash ﬂows in the period in which the amounts are paid. In addition, as a result of the

ongoing legal proceedings, the Company and/or its subsidiaries may be subject to damages, civil ﬁnes, or other sanctions.

Additionally, defending against these lawsuits and proceedings may involve signiﬁcant expense and diversion of management’s

attention and resources.

As at the date of approval of these ﬁnancial statements for issue, 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 yet issued a ruling on the motions. As of the date of

approval of these annual ﬁnancial statements for issue, 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 ﬁnancial statements for issue, 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 ﬁnancial statements for issue, 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 these annual ﬁnancial statements for

issue.

HUUUGE INC.

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●

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 ﬁnancial statements for issue, 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 these annual ﬁnancial statements for issue, 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 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 these annual ﬁnancial statements for issue, 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

these annual ﬁnancial statements for issue, 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 these annual ﬁnancial statements, a party to any signiﬁcant court or arbitration proceedings or

before any public authority.

17.

Pledges and collaterals

During the reporting periods and till the date of issuing these ﬁnancial statements the Company did not enter in a pledge or

collateral agreement on its assets.

HUUUGE INC.

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18.

Related party transactions

The table below presents aggregated balances of transactions with related parties during the reporting and comparative

periods.

related parties

Sales to a related party

Dividend income

Purchase from a related party

Huuuge Global Ltd

2023

6,755

158,972

2022

13,850

Huuuge Games Sp. z o.o.

2023

757

2022

Huuuge UK

2023

476

2022

661

Other entities

2023

2022

2023

6,760

159,729

478

2022

13,853

761

The table below presents aggregated balances of transactions with related parties during the reporting and comparative

periods.

Trade receivables from a related party,

including dividend receivables

As at December 31, 2023

As at December 31, 2022

Huuuge Global Ltd

11,595

648

Huuuge UK

139

449

Other entities

Total

11,734

1,100

There were no Trade liabilities to related parties as at December 31, 2023. Trade liabilities to related parties amounted to USD 9

thousand as at December 31, 2022.

The Company is the ultimate parent to its Group. Transactions between related parties took place on terms equivalent to those

that apply to transactions concluded on market terms.

The Company purchases certain advertisement services from third parties (mostly Facebook), which are subsequently

recharged to Huuuge Global Limited. For more information, please refer to Note 2.2

Key judgements and estimates

–

Model of

revenue recognition

The Company recognizes revenue when services are transferred to the customer, at a value that reﬂects the price expected by

the entity, in exchange for the transfer of those goods and services.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

Therefore, total gross revenue in the years ended December 31, 2023 and December 31, 2022 amounted to USD 6,755 thousand

and USD 13,850 thousand respectively.

Cost of re-invoiced sales and marketing services in the year ended December 31, 2023 amounted to USD 5,178 thousand (USD

10,839 thousand and USD 89 thousand re-invoiced back-oﬃce services the year ended December 31, 2022), fully netted in the

statement of comprehensive income.

For more details regarding revenue generated by game design and stewardship in the

total amount of USD 1,577 thousand in the year ended December 31, 2023 (USD 2,922 thousand in the year ended December 31,

2022) please refer to Note 3

Revenue.

In addition, related parties’ transactions include transactions with the management of the Company. For more details, please

refer to Note 19

Transactions with management of the Company

19.

Transactions with management of the Company

Transactions with management of the Company for the years ended December 31, 2023 and December 31, 2022 was as

follows:

Year ended

December 31, 2023

Year ended

December 31, 2022

Base salaries

1,905

1,156

Bonuses and compensation based on the Group’s ﬁnancial

result for the year

562

271

Share-based payments

398

417

Total

2,865

1,844

On March 7, 2023 the agreement was concluded between the Company and Mr. Rod Cousens, governing his board service and

executive service as co-Chief Executive Oﬃcer of the Company during the current board term, providing for a 12-month early

notice period for termination. This agreement terminated Mr. Rod Cousens’s executive service by mutual agreement, the

Company conﬁrmed Mr. Cousens’s entitlement to payment in lieu of advance notice.

20.

Audit fees

Year ended

December 31, 2023

Year ended

December 31, 2022

Audit of ﬁnancial statements

170

174

Review of interim ﬁnancial statements

Total

227

238

Audit of ﬁnancial statements relates to the audit of separate ﬁnancial statements of Huuuge Inc., and the audit of the Group’s

consolidated ﬁnancial statements prepared in accordance with IFRS, as well as the audit of separate ﬁnancial statements of the

Group’s subsidiaries prepared in accordance with local generally accepted accounting principles, to the extent performed by the

Group Auditor. Audit services performed for Huuuge Global Ltd. include standard tax compliance services.

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

21.

Employment structure

Average Company’s number of employees for the years ended December 31, 2023 and December 31, 2022 was as follows:

Year ended

December 31, 2023

Year ended

December 31, 2022

Executive and business management

Sales and marketing

Administration

Games development

Total

22.

Subsequent events

After December 31, 2023 and up to the date of approval of these separate ﬁnancial statements for issue no signiﬁcant events

except the following have occurred.

Dividend paid by Huuuge Global Limited

As presented in the Note 3

Revenue and dividend income

, the outstanding balance of the dividend from Huuuge Global Ltd. in the

amount of USD 10,000 thousand was received on March 1, 2024.

Options granted to key management personnel

Based on the resolutions of the Board of Directors of Huuuge, Inc. 585,000 options were granted to key management personnel

of Huuuge, Inc. Group on February 6, 2024. For details regarding share-based payment arrangements, please refer to Note 14

Share-based payment arrangements

to these ﬁnancial statements.

Electronically signed

Wojciech Wronowski

Oﬃcer of Huuuge Inc., CEO

March 14, 2024

HUUUGE INC.

Separate ﬁnancial statements as at and for the year ended December 31, 2023

(all amounts in tables presented in thousand USD, except where stated otherwise)

This version is a pdf of executed xHTML Separate ﬁnancial statements as at and for the year ended December 31, 2023. In case of any discrepancies xHTML version shall prevail

HUUUGE, INC.

2300 W Sahara Ave.,

Suite #680, Mailbox #32,

Las Vegas, NV 89102

United States of America

Contact for Investors

ir@huuugegames.com

https://ir.huuugegames.com

http://huuugegames.com