Top shelf gaming execs get on board for a Mighty Kingdom turnaround

A high-powered group of gaming experts has agreed to join and help fund gaming company Mighty Kingdom, setting up a showdown with activist major shareholder Shane Yeend.

Conan Chop Chop is one of the games developed by Mighty Kingdom.

A high-powered group of gaming experts has agreed to join and help fund embattled game developer Mighty Kingdom, setting up a showdown with activist major shareholder Shane Yeend.

The ASX-listed outfit on Friday told shareholders it had raised $726,000 through the issue of convertible notes to provide short term capital, and also said it had signed a letter of intent to bring on a new board and management team.

The proposed new board members, Mark Aubrey, David Yin and Chris Whiteman, have significant gaming experience, with Mr Aubrey heading up Activision Blizzard Asia Pacific for more than seven years and Mr Yin the former chief executive of gaming company Storms which was acquired by iCandy, where he subsequently was president of Web 3 gaming.

Mr Whiteman is a director of Hong Kong-Based Animoca Brands, which is valued at more than $5bn.

Mighty Kingdom is also proposing to bring on McKinsey-trained transformation expert Hang Yan to put together a new strategic plan for the company.

“A non-binding letter of intent has been signed with a consortium of Australia’s top gaming executives to facilitate their appointment to the board of directors,’’ Mighty Kingdom told the ASX.

“This agreement includes exclusivity arrangements paving the way for a multi-year strategic plan and capital raising and potential appointment to the board of directors and management.’’

Mighty Kingdom said it expected to appoint the proposed new directors to the board “on or before 15 January 2024’’.

This is just days before just days before a scheduled extraordinary general meeting, at which Mr Yeend’s company Gamestar will attempt to unseat the current board and install its own nominees, including Mr Yeend himself.

Shane Yeend is trying to spill the Mighty Kingdom board.

Mr Yeend’s proposed board members, Roseanne Healy, Keith Middleton and Boris Patkin, lack experience in the gaming sector, Mighty Kingdom says. Mr Yeend is also proposing to set up a 10 member advisory board of global gaming experts and install his nominee for chief executive should his board putsch on January 19 be successful.

Mighty Kingdom said on Friday that the proposed new board members had participated in the new capital raise, and had high hopes for the company.

“With deep industry experience and a keen eye for growth opportunities, the consortium’s vision for Mighty Kingdom covers all aspects of the transformational path needed to deliver shareholder returns,’’ the company said.

“Led by Mr Hang Zhang and the existing Mighty Kingdom management team, the consortium will develop a strategic plan for the company’s future.

“This plan, including recommendations, will be presented to shareholders by January 15th, 2024, alongside the proposed board appointments.

“The proposed new board members, in collaboration with Mighty Kingdom, is confident in its ability to spearhead a capital raising process.

“This will address working capital needs and fuel growth opportunities. Specific details will be disclosed within the strategic plan.

“Recognising the need for immediate action, the proposed new board members will also support any short-term financing requirements to ensure Mighty Kingdom’s working capital needs are met until the capital raise is completed.’’

The company said a “definitive proposal” encompassing restructuring, capital raising and board appointments was expected to be put to another EGM no later than February 28.

The company said the $726,000 convertible note issue had been necessary because Gamestar and other shareholders had voted down the company’s capacity to raise capital at the November annual meeting.

Gamestar also failed to pay $2m out of a $4m capital raise commitment it made in 2022, with Mr Yeend and the company saying Mighty Kingdom had not met its commitments, which the company denies.

Former ABC managing director Michelle Guthrie was also ousted as chair of the company at the November annual meeting, where the company’s remuneration report also received an overwhelming protest vote.

Former Mighty Kingdom chair Michelle Guthrie.

Mighty Kingdom chair David Butorac said the plan which had emerged from the strategic review “will chart a clear course for growth and unlock the company’s immense potential”

“Details of a capital raising plan will be presented alongside the strategic plan, ensuring full transparency and shareholder involvement in shaping the company’s trajectory.

“These partnerships bring not just financial strength but also deep industry knowledge and connections, opening doors to exciting opportunities for growth and collaboration.

“The proposed new board members are also committed to providing short-term financial support to ensure Mighty Kingdom thrives until the capital raise is completed. This demonstrates their commitment to the potential that can be unlocked.”

Mighty Kingdom shares were 17.6 per cent lower at 1.4c in early trade, with the convertible notes raising the new funds at 1c per share.

Mighty Kingdom listed at 30c in April 2021 after a $18m capital raise. The company lost $10.8m in its first year and $9.1m the following year, burdened by excessive staffing costs.

The company is now valued at just $8m.

Originally published as Top shelf gaming execs get on board for a Mighty Kingdom turnaround