HUUUGE, INC.: Zawarcie umów dotyczących inwestycji w Bananaz Studios Ltd.

Current Report No. 13/202417 March 2024Conclusion
of agreements regarding the investment in Bananaz Studios Ltd.Huuuge,
Inc. (the “Issuer”) hereby announces that on 17 March 2024 (the “Signing
Date”) the Issuer concluded: (i) a simple agreement for future equity
(the “SAFE”) with Bananaz Studios Ltd., with its seat in Tzur Yitzhak,
State of Israel (“Bananaz”); and (ii) a call option deed agreement (the
“Call Option Deed”) with Bananaz and its shareholders, including the
founders of Bananaz (collectively, the “Transaction Documents”). 
Bananaz currently operates “Slots Cash”, a product that the Issuer views
as attractive and complementary to its core social casino business.
Under the SAFE, the Issuer undertook to invest in Bananaz up to USD
6,000,000 in exchange for the future right to receive newly issued
shares in Bananaz (the “Payment”). The Payment will be split into two
tranches: (i) payment of the first tranche in the amount of USD
3,500,000 was ordered on the Signing Date; and (ii) the second tranche
in the amount of USD 2,500,000 shall be payable following the
achievement by Bananaz of certain key performance indicators indicated
in the SAFE, or at the Issuer’s sole discretion, during the period
commencing 9 months and ending 18 months after the Signing Date (the
“Second Tranche”). The Issuer will be investing in Bananaz at a
pre-money valuation of USD 16,500,000. Bananaz will primarily use the
proceeds to grow its team, execute on the roadmap for Slots Cash, and
invest in user acquisition. The SAFE provides for the conversion of the
Payment into shares in Bananaz’s share capital upon the occurrence of
the certain conversion events referred to in the SAFE, including the
exercise of the Call Option (as defined below).  In accordance with the
provisions of the Call Option Deed, the Issuer is granted the right (not
an obligation) to acquire the entire issued share capital of Bananaz
(existing or future) together with all rights attached thereto (the
“Call Option Shares”, the “Call Option”). The Issuer is entitled to
exercise the Call Option at any time following the investment of the
Second Tranche and ending on the date falling 24 months following the
date of the investment of the Second Tranche. The price of the Call
Option Shares shall be paid in two instalments.  The first instalment
shall be calculated based on the EBITDA of Bananaz adjusted by a
determined multiplier and by certain balance sheet and other items
outlined in the Call Option Deed. However, in any case the price for the
Call Option Shares will not be lower than USD 20 million for all the
shares in the share capital of Bananaz (including the shares which will
be issued to the Issuer according to the SAFE), before the
above-mentioned agreed adjustments. The first instalment shall be
payable at the completion of the Call Option.  The size of the second
instalment will be determined based on a multiple of future EBITDA of
Bananaz, or a multiple of future EBITDA and future revenue of Bananaz in
tandem and will be the difference between the value calculated using
this methodology, and the first instalment (the “Deferred
Consideration”). The Deferred Consideration attributable to the founders
(not all of the sellers) is subject to a time base vesting mechanism and
linked to their employment by Bananaz on a full-time basis. The Deferred
Consideration will be paid within 10 days following the lapse of 36
months after the payment of the first instalment. Furthermore, from the
Signing Date, the Issuer is granted typical rights of a minority
shareholder, including but not limited to: the right to appoint one
director to the Board of Directors of Bananaz, certain Board of
Directors and shareholder’ reserved matters; and information rights. The
Transaction Documents are governed by English law. Legal basis: Article
17(1) of the Regulation (EU) No. 596/2014 of the European Parliament and
of the Council of 16 April 2014 on market abuse (market abuse
regulation) and repealing Directive 2003/6/EC of the European Parliament
and of the Council and Commission Directives 2003/124/EC, 2003/125/EC
and 2004/72/EC – confidential information.

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