Mighty Kingdom borrows against future grant revenue to stay afloat

Game developer Mighty Kingdom has raised money at an onerous rate to keep the lights on but says it is still working on corporate opportunities which could deliver value.

Mighty Kingdom develops games for mobile devices.

Mighty Kingdom has raised money at an onerous interest rate to keep the lights on and says it is still working on corporate opportunities, just over a week after a potential material acquisition fell over.

The game developer, which has had its shares suspended from trade since early November, said on Tuesday it was still able to pay its bills when they fell due, and announced it had raised $1.2m at an interest rate of 20 per cent.

The money raised has been secured against research and development and digital games tax offset payments the company expects to receive from federal and state governments.

The company’s former managing director David Yin stepped down in late November, just eight months into the role, having previously had the ambition of turning the struggling company around.

A few days later the company’s chair David Butorac was resoundingly voted off the board at the annual general meeting in November, but Mighty Kingdom said on Tuesday he would stay in the role while the company appointed his successor, in keeping with rules under the Corporations Act.

Non-executive director Ian Hogg, who served on the board from August 2022, also resigned in November.

Mighty Kingdom has raised money at an onerous rate to keep the lights. Picture: iStock

Mighty Kingdom said on Tuesday that it was still aiming to progress business opportunities with a view of getting the company back on an even keel.

“Mighty Kingdom’s current contracts continue to be serviced effectively with ongoing initiatives underway to drive profitability and minimising cash burn,’’ it told the ASX in a statement.

“In addition, the company is actively progressing corporate opportunities that it believes have the potential to add significantly to shareholder value.

“It is expected that additional updates will be made to shareholders in the short-term with respect to both ongoing operations, new opportunities and board composition.”

Mighty Kingdom’s board was embroiled in a fight for control of the company for much of the second half of 2023, with Adelaide entrepreneur Shane Yeend attempting to roll the board and install himself and a hand-picked team of directors, none of whom had any gaming experience.

Mr Yeend had earlier been locked in a stoush with the company, after failing to pay for about half of the $4m in shares he ­acquired in a 2022 emergency capital raise. Mr Yeend succeeded in ousting former chair Michelle Guthrie from the board in late 2023, but failed in his bid to win control of the company.

Following that defeat, he sold his shares.

Mr Yin and a group of investors and existing shareholders subsequently tipped more than $8m into the company, with a ­vision espoused earlier this year to hit profitability in the current financial year.

The company’s latest report showed it boosted quarterly game revenue for the three months to the end of September by 68 per cent over the previous quarter to $1.2m, and trimmed ­operating costs by 10 per cent. It still burned through $2.4m in cash, however, and had just $891,000 left at the end of the quarter.

The company launched the Power Rangers Mighty Force game in August, and also delivered two more games for Google’s Fitbit Ace during the period.

The company’s shares last traded at 4.5c, having undergone a 15 for one consolidation in August.

Originally published as Mighty Kingdom borrows against future grant revenue to stay afloat