Mighty Kingdom staff threaten to walk ahead of vote on firm’s future

Practically all the respondents to a ballot of 56 per cent of employees at Mighty Kingdom have “indicated that they’d not really feel comfy to stay at MK if the resolutions are handed at Friday’s EGM”.

Shareholders will this afternoon vote in a unprecedented basic assembly (EGM) on the management of the Adelaide-based online game firm, in a coup led by the agency’s largest shareholder Shane Yeend who owns 28.5 per cent of the agency through two entities: Creativeness Leisure and Gamestar Studios.

The Yeend-proposed EGM accommodates seven resolutions – three of which might see the removing of all Mighty Kingdom administrators together with chairman David Butorac and non-executive director Ian Hogg. Butorac was appointed to his management function final 12 months after shareholders ousted former chair Michelle Guthrie.

It additionally proposes the election of 4 new administrators: Creativeness Leisure founder Yeend, Enterprise Company managing director Roseanne Healy, Middleton Group managing director and founder Keith Middleton and funding advisor Boris Patkin.

The Mighty Kingdom board has beneficial shareholders vote in opposition to all the resolutions, saying “the administrators take into account that the resolutions will not be in the very best pursuits of the corporate” and “Yeend’s proposed administrators haven’t any digital gaming expertise”.

Forward of the vote, a letter penned by Mighty Kingdom employees was shared with InDaily saying if Yeend was profitable this afternoon, staff would stroll.

“A vote for Shane is a vote in opposition to the MK group, and a enterprise with out a group shall be catastrophic for shareholders,” employees stated within the letter titled “A Heartfelt Plea from The Employees of Mighty Kingdom”.

The four-page letter noticed employees expressing their “deep issues and fears that linger inside the Mighty Kingdom household”.

“We’re the group that has poured our hearts and souls into making Mighty Kingdom the unbelievable place it’s at present, and we’re deeply involved every little thing we’ve constructed may crumble this week,” employees stated.

“Greater than ever, we’re overwhelmed with a mixture of feelings – apprehension, concern, and real concern for the way forward for the Mighty Kingdom we maintain expensive. The looming Extraordinary Normal Assembly and the proposed resolutions have solid a darkish shadow over our beloved office, leaving us grappling with uncertainties that reduce to the core of our skilled and private lives.”

The employees stated they have been notably involved about “the return of Shane Yeend” who was the corporate’s CEO for a quick interval final 12 months earlier than resigning in September 2023.

Yeend is the founder Creativeness Leisure – which launched the Battle of the Sexes board sport in 1996 and achieved greater than $500 million in gross sales for its patented iDVD interactive TV sport software program. He additionally based Gamestar Studios – one other digital gaming firm that lets customers stream “Household Feud” and “Scene It?” on their TVs.

Yeend was changed by present Mighty Kingdom CEO Simon Rabbitt in October, two weeks after the online game firm introduced it was chasing greater than $2 million in ‘excellent’ settlement funds from Yeend.

Since Yeend’s resignation, he has been agitating for the dissolution of the Mighty Kingdom board. He was profitable late final 12 months in rallying shareholders in opposition to former chair Guthrie, and has been vocal on LinkedIn and in communications with shareholders about his disappointment with the efficiency of the CBD-based agency in addition to the corporate’s December 29 announcement about three new board members.

Introduced on the 12 months’s finish, Mighty Kingdom acquired commitments for $726,000 in short-term funding and put ahead three names for its proposed board together with former managing director of Activision Blizzard APAC Mark Aubrey, former CEO and government director of Storms Gaming Studio David Yin and transformation skilled Cling Zhang.

They have been introduced in to assist flip across the agency which has been languishing on the share market. Over the previous 12 months, shares have fallen by 60 per cent in worth, and are price simply 1.6 cents on the time of writing giving the agency a market capitalisation of $6.47 million. The corporate listed on the ASX in 2021 at 30 cents per share and a valuation of $51 million.

Based in 2010, Mighty Kingdom predominately makes licensed video video games for cellular units together with Star Trek Decrease Decks: The Badgey Directive, Conan Chop Chop and Gabby’s Dollhouse.

Aided by $2 million of state authorities funding, the corporate established a video games improvement hub within the Adelaide CBD in 2017.

The agency laid off an undisclosed variety of employees a couple of 12 months in the past following “disappointing” outcomes, which additionally led to a change in management with founder and CEO Phillip Mayes stepping down in January final 12 months.

Of their letter, employees stated the “prospect of a management change, notably one that may usher within the return of Shane Yeend, has despatched shockwaves by our close-knit neighborhood”.

“We vividly recall the challenges we confronted throughout his earlier tenure as CEO … and the toll it took on our morale,” employees stated.

“The injuries inflicted throughout these six months run deep, and the mere considered reliving these days is disheartening.”

They stated the present management group, together with CEO Simon Rabbitt, “caused optimistic modifications that haven’t solely formed the trajectory of Mighty Kingdom however have additionally revitalised our spirits”.

“Nonetheless, the proposed resolutions threaten to shatter these desires and plunge us right into a actuality that we dread,” they stated.

“It’s not nearly a change in management; it’s about shedding the very essence of what makes Mighty Kingdom a particular place to work.

Present CEO Simon Rabbitt additionally posted a letter to shareholders at present, pleading with them to vote in opposition to Yeend’s proposed resolutions.

“Immediately, we stand at a pivotal second for the corporate’s future,” Rabbitt’s letter reads.

“Whereas Mighty Kingdom has confronted challenges and underperformed prior to now, I write to guarantee you the long-term sustainability plan has been carried out. The ultimate piece was securing high gaming consultants to help the group and drive a transparent imaginative and prescient for the longer term. I’m enthusiastic about what this consortium will deliver to Mighty Kingdom.

“Proper now, Mr Yeend proposes changing the whole board and key administration that has led this turnaround.

“The fixed noise and threats have unfairly suppressed our share worth, obscuring the numerous worth created prior to now 12 months and our optimistic efficiency.”

Yeend, through letters despatched to Mighty Kingdom shareholders, stated the corporate’s present leaders “haven’t any plan”.

“They’ve massively diluted you all once more between Christmas and New 12 months if the convertible observe will get authorized,” he stated, referring to the December 29 short-term funding announcement.

“It’s time for the remainder of the MKL board to go.”

Yeend’s plan, if he’s profitable this afternoon, is to nominate a brand new managing director (“Feminine CEO gaming tech veteran of 25 years”), title Sam White as CEO of MKL’s sport studio, “reduce prices instantly to zero money burn inside seven days”, make investments $2 million into the corporate, cancel the $726,000 quick time period funding tranche, and “when we’ve accomplished the above and the inventory worth jumps… we’ll then increase cash for value-add acquisitions which can be earnings per share accretive”.

“I feel we might agree that up to now, it’s been nothing however an absolute catastrophe since itemizing. We’re right here and devoted to creating each crucial change,” Yeend stated in a letter to shareholders.

“I hate how these microcaps are nearly an business for individuals to only suck them dry with charges and appear to nearly get away with it with no conscience, in-between asking shareholders for increasingly more cash, diluting them to oblivion as MKL have performed time and time once more.

“We’re assured in our capability to revive shareholder worth expeditiously and ready to be held to account to all MKL shareholders.”

Supported by the Authorities of South Australia