Mighty Kingdom Limited: MAKE YOUR VOTE COUNT
FREQUENTLY ASKED QUESTIONS
The Board has received several questions from shareholders regarding the upcoming EGM. This is a critical point in MKL’s journey and we want to ensure shareholders are fully informed of the facts and aren’t distracted by the volume of misinformation. To assist shareholders we have put together this Frequently Asked Questions guide to assist you.
MKL urge you to vote NO to all resolutions at the January 19th EGM.
Question: Why have the Board and Management taken so long to act and bring something to the table?
Answer:
David and Ian were appointed to the board 18 months ago. Simon joined the company in January 2023 and then became interim CEO when Mr Yeend suddenly left the company. During their time in these roles, the company has demonstrated a significant turnaround and has negotiated and constructed the current consortium proposal.
All the Board members who were at the company during the period of decreasing shareholder value are no longer directors.
The proposed new directors, as part of the consortium, bring great experience and networks in the video games industry and significant success.
Question: Is MKL seeking debt financing in an underhanded way and trying to avoid scrutiny?
Answer: No. MKL's pursuit of debt financing is a direct result of:
Gamestar+'s failure to pay its $2.088 million obligation from the tranche 2 capital raise: This created a critical need for operating capital.
The failure of proposed resolutions at the recent AGM: These resolutions, if passed, would have provided alternative funding options, but their failure necessitated exploring other avenues.
The recent Convertible Note raise was required to maintain cash flow during this period and was offered to all major shareholders and the proposed consortium.
The proposed new Directors wanted to participate to demonstrate to shareholders that they had “skin in the game”.
Whilst, like all commercial deals, confidentiality was required to achieve sign-off, the Board have been open with shareholders and the market about this funding.
Question: Did Mr. Yeend offer MKL a loan to ensure its liquidity, as he claims?
Answer: No. At no stage has Mr. Yeend or any entity associated with him made an offer to MKL for funding (other than broad statements made in the media).
Question: Is the Board acting in its own self-interest?
Answer: No. The Board’s sole duty is to all shareholders, not themselves or any particular shareholding group.
Financial Options: The Board has considered and evaluated all options for maintaining the financial security of MKL. This has included deferring their own director fees.
Public Scrutiny: The directors' integrity and experience are verifiable, making unfounded claims of self-interest easily discredited.
Question: Should this Board remain in control of MKL?
Answer: Yes. This board and the proposed new Directors are highly skilled and have delivered demonstratable results.
The current Board members were appointed less than 18 months ago (two of whom were appointed at Mr Yeend’s suggestion) and have been the drivers of change that have led to the turnaround of MKL.
The proposed new Directors bring extensive and relevant games industry experience with track records of achieving results.
Question: Did Mr Yeend request for the current Board members to be appointed?
Answer: Yes.
It should also be noted that two of the current three Directors (David Butorac and Ian Hogg) were appointed to the Board in August 2022 at the behest of Mr Yeend.
However, due to the Directors holding Mr Yeend to account, he is now proposing they be removed and new Directors be appointed.
Question: Did the Takeovers Panel agree with Mr Yeend and his companies to withdraw MKL’s claim against Mr Yeend and his entities? Did they say the claim was ‘frivolous’?
Answer: No.
There are strict rules that apply when discussing matters before the Takeovers Panel, which MKL respect. This means we legally can’t go into detail about this matter, as it is technically still before the Panel.
The Panel process involves both sides giving enforceable undertakings. The Panel made no finding against MKL and certainly did not state that the claim was frivolous. See the Panel’s media release on the matter here: TP23-045
As part of the Takeovers Panel proceeding, MKL has entered into a buy back agreement with Gamestar in relation to the 59,657,143 relevant shares. Once this buy back has been approved by Shareholders, this will reduce the number of issued shares thus reducing the dilution of all shareholders.
Question: Did MKL mislead Mr. Yeend about the company's financial performance by showing him a budget with a lower loss than they actually incurred?
Answer: No.
No Full-Year Budget: MKL has never provided to anyone a full-year budget with a $1 million loss for FY23.
Limited Scope Forecast: MKL did (at Mr Yeend’s request) provide a forecast that covered only seven months which did not represent a Budget nor did it represent the expected results of the business for the financial year ending 30 June 2023
Second Half Improvement: The actual loss for the second half of FY23 was $1.7 million, lower than the first half's $6.9 million loss, demonstrating operational progress.
MKL's performance aligned with or even surpassed forecasted expectations.
Question: Does MKL face legal claims of over $5mil?
Answer: No.
There are no formal pending or threatened claims against MKL, other than what Mr Yeend has said publicly (which is without detail or substance).
Question: Did Gamestar+ offered to settle its unpaid shares @$0.035c prior to the company AGM?
Answer: No.
No offer of settlement has ever been made to the company by Mr Yeend, Gamestar+ or its related parties.
Question: Mr Yeend says he will do a better job at running MKL.
Answer: No. MKL suggest that shareholders consider Mr Yeend’s performance when he was CEO of MKL.
Mr Yeend was CEO of MKL for 5 months, and it was within his remit, and indeed he was encouraged by the Board to instigate operational improvement and articulate a strategic direction for the company.
During his time as CEO, Mr Yeend introduced no new business to the company and tabled no strategy to create shareholder value.
Question: Is Mr Yeend and MKL planning to merge Gamestar+ into MKL?
Answer: No.
At no point has there been any discussion regarding a merger of MKL and Gamestar+.
Despite Mr Yeend recently communicating to Gamestar+ investors that he was in the advanced stages of discussion with MKL to merge the businesses, MKL is unaware of what he is referring to, as no such conversations have occurred.
Question: Can costs be cut immediately to zero cash burn within 7 days.
Answer: Not practically.
MKL’s major expense is staff cost. To reduce this would involve redundancies that would lead to an immediate increase in cost and cash outflow.
Staff are MKL’s greatest asset and our existing partners rely on these people to continue to deliver great games.
Question: What is the connection to Animoca Brands, iCandy, Activision, etc ?
Answer:
The proposed new directors being put forward by MKL as part of the consortium have strong relationships and connections to these companies.
As part of the due diligence process, there have been ongoing discussions as to where the opportunities exist for partnerships and future funding by these parties.
MKL urge you to vote NO to all resolutions at the January 19th AGM.
We recommend that you vote AGAINST all resolutions proposed by the Requisitioning Shareholders at the 19th January 2024 EGM.
The Directors consider that the resolutions are NOT in the best interests of the Company.
❌ ITEM 1: Vote AGAINST Election of Director – Roseanne Healy
We recommend voting AGAINST Roseanne Healy election to a position on the board.
❌ ITEM 2: Vote AGAINST Election of Director – Keith Middleton
We recommend voting AGAINST Keith Middleton election to a position on the board.
❌ ITEM 3: Vote AGAINST Election of Director -Boris Patkin
We recommend voting AGAINST Boris Patkin election to a position on the board.
❌ ITEM 4: Vote AGAINST the Election of Director – Shane Yeend
We recommend voting AGAINST Shane Yeend election to a position on the board.
❌ ITEM 5: Vote AGAINST the Removal of Director – David Butorac
We recommend voting AGAINST the removal of David Butorac from the board.
❌ ITEM 6: Vote AGAINST the Removal of Director – Ian Hogg
We recommend voting AGAINST the removal of Ian Hogg from the board.
❌ ITEM 7: Vote AGAINST the Removal of any other Directors
We recommend voting AGAINST the removal of any other Director from the board.
More important information and helpful links: