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Adelaide-based game developer Mighty Kingdom (ASX: MKL) will dilute shareholdings further after receiving commitments to lift its capital raise from $6.2 million to $8.2 million as sophisticated and institutional investors bought in to a proposed reset with new leadership.
With the exception of institutional backer Phoenix Portfolios and some others, there was little interest overall from existing investors in the raise with the entitlement offer only attracting $1 million, but a shortfall bookbuild that followed made up the difference and more, as today's announcement reveals.
The raise itself is at a substantial discount to Mighty Kingdom's prior share price and was to represent 500 per cent of prior issued capital with the release of 2.1 billion new shares.
Now that figure has been amplified to around 650 per cent with an additional 660 million shares to be issued in order to raise an extra $1.98 million.
Meanwhile, CEO Shane Yeend has all but liquidated his substantial holding in Mighty Kingdom and is mulling a class action for investors who have seen the share price collapse by 94 per cent since the start of 2022.
Mighty Kingdom notes the bookbuild saw strong support from a number of broking firms with prior exposure to Mighty Kingdom via their clients, demonstrating positive investor backing towards the company and its strategic direction.
The company emphasises its attractiveness has been enhanced by new management with the appointments of former Google Play exec David Yin as CEO, and new board appointments with Mark Aubrey, former managing director of Activision Blizzard King (ABK) APAC, and Chris Whiteman, who sits on the board of both Animoca Brands and iCandy.
Key executives and associates of Hong Kong-based and formerly ASX-listed Animoca Brands were among "some of the most senior gaming entrepreneurs and executives" in the Australian and global gaming industries that participated strongly in the raise.
"We are hugely excited and appreciative at the depth of support afforded to us – not only by existing shareholders who have stayed with us during difficult times, but also by the genuine interest and backing of what I would consider to be some of the best and brightest minds in the global gaming industry," says Mighty Kingdom CEO David Yin.
"This support from investors demonstrates strong belief in the people and path we have outlined for the future of Mighty Kingdom."
With the funds expected to give Mighty Kingdom with flexibility to take on new contracts in the work-for-hire space as well as co-development and acquisition opportunities, the group's chair David Butorac describes the augmented raise as a pivotal moment for the company.
"I would like to thank all our existing shareholders who increased their investment in the company and welcome our exciting new group of investors," Butorac says.
"The level of interest that we have received from sophisticated and institutional investors as well as senior people across the gaming industry has been truly amazing.
"Most importantly, this shows clear confidence and support in the future vision of Mighty Kingdom and we look forward to once again being a key player in the games industry.
"This additional investment will enable us to be ready to take advantage of any opportunities that arise and be well capitalised to deliver."
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