Nearly all of the respondents to a poll of 56 per cent of staff at Mighty Kingdom have “indicated that they would not feel comfortable to remain at MK if the resolutions are passed at Friday’s EGM”.

Shareholders will this afternoon vote in an extraordinary general meeting (EGM) on the leadership of the Adelaide-based video game company, in a coup led by the firm’s largest shareholder Shane Yeend who owns 28.5 per cent of the firm via two entities: Imagination Entertainment and Gamestar Studios.

The Yeend-proposed EGM contains seven resolutions – three of which would see the removal of all Mighty Kingdom directors including chairman David Butorac and non-executive director Ian Hogg. Butorac was appointed to his leadership role last year after shareholders ousted former chair Michelle Guthrie.

It also proposes the election of four new directors: Imagination Entertainment founder Yeend, Enterprise Corporation managing director Roseanne Healy, Middleton Group managing director and founder Keith Middleton and investment advisor Boris Patkin.

The Mighty Kingdom board has recommended shareholders vote against all of the resolutions, saying “the directors consider that the resolutions are not in the best interests of the company” and “Yeend’s proposed directors have no digital gaming experience”.

Ahead of the vote, a letter penned by Mighty Kingdom staff was shared with InDaily saying if Yeend was successful this afternoon, employees would walk.

“A vote for Shane is a vote against the MK team, and a business without a team will be catastrophic for shareholders,” staff said in the letter titled “A Heartfelt Plea from The Staff of Mighty Kingdom”.

The four-page letter saw staff expressing their “deep concerns and fears that linger within the Mighty Kingdom family”.

“We’re the team that has poured our hearts and souls into making Mighty Kingdom the incredible place it is today, and we’re deeply concerned everything we’ve built might crumble this week,” staff said.

“More than ever, we are overwhelmed with a mix of emotions – apprehension, fear, and genuine concern for the future of the Mighty Kingdom we hold dear. The looming Extraordinary General Meeting and the proposed resolutions have cast a dark shadow over our beloved workplace, leaving us grappling with uncertainties that cut to the core of our professional and personal lives.”

The staff said they were particularly concerned about “the return of Shane Yeend” who was the company’s CEO for a brief period last year before resigning in September 2023.

Yeend is the founder Imagination Entertainment – which launched the Battle of the Sexes board game in 1996 and achieved more than $500 million in sales for its patented iDVD interactive TV game software. He also founded Gamestar Studios – another digital gaming company that lets users stream “Family Feud” and “Scene It?” on their TVs.

Yeend was replaced by current Mighty Kingdom CEO Simon Rabbitt in October, two weeks after the video game company announced it was chasing more than $2 million in ‘outstanding’ settlement funds from Yeend.

Since Yeend’s resignation, he has been agitating for the dissolution of the Mighty Kingdom board. He was successful late last year in rallying shareholders against former chair Guthrie, and has been vocal on LinkedIn and in communications with shareholders about his disappointment with the performance of the CBD-based firm as well as the company’s December 29 announcement about three new board members.

Announced at the year’s end, Mighty Kingdom received commitments for $726,000 in short-term funding and put forward three names for its proposed board including former managing director of Activision Blizzard APAC Mark Aubrey, former CEO and executive director of Storms Gaming Studio David Yin and transformation expert Hang Zhang.

They were brought in to help turn around the firm which has been languishing on the share market. Over the past 12 months, shares have fallen by 60 per cent in value, and are worth just 1.6 cents at the time of writing giving the firm a market capitalisation of $6.47 million. The company listed on the ASX in 2021 at 30 cents per share and a valuation of $51 million.

Founded in 2010, Mighty Kingdom predominately makes licensed video games for mobile devices including Star Trek Lower Decks: The Badgey Directive, Conan Chop Chop and Gabby’s Dollhouse.

Aided by $2 million of state government funding, the company established a games development hub in the Adelaide CBD in 2017.

The firm laid off an undisclosed number of staff about a year ago following “disappointing” results, which also led to a change in leadership with founder and CEO Phillip Mayes stepping down in January last year.

In their letter, staff said the “prospect of a leadership change, particularly one that might usher in the return of Shane Yeend, has sent shockwaves through our close-knit community”.

“We vividly recall the challenges we faced during his previous tenure as CEO … and the toll it took on our morale,” staff said.

“The wounds inflicted during those six months run deep, and the mere thought of reliving those days is disheartening.”

They said the current leadership team, including CEO Simon Rabbitt, “brought about positive changes that have not only shaped the trajectory of Mighty Kingdom but have also revitalised our spirits”.

“However, the proposed resolutions threaten to shatter these dreams and plunge us into a reality that we dread,” they said.

“It’s not just about a change in leadership; it’s about losing the very essence of what makes Mighty Kingdom a special place to work.

Current CEO Simon Rabbitt also posted a letter to shareholders today, pleading with them to vote against Yeend’s proposed resolutions.

“Today, we stand at a pivotal moment for the company’s future,” Rabbitt’s letter reads.

“While Mighty Kingdom has faced challenges and underperformed in the past, I write to assure you the long-term sustainability plan has been implemented. The final piece was securing top gaming experts to support the team and drive a clear vision for the future. I am excited about what this consortium will bring to Mighty Kingdom.

“Right now, Mr Yeend proposes replacing the entire board and key management that has led this turnaround.

“The constant noise and threats have unfairly suppressed our share price, obscuring the significant value created in the past year and our positive performance.”

Yeend, via letters sent to Mighty Kingdom shareholders, said the company’s current leaders “have no plan”.

“They have massively diluted you all again between Christmas and New Year if the convertible note gets approved,” he said, referring to the December 29 short-term funding announcement.

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

Yeend’s plan, if he is successful this afternoon, is to appoint a new managing director (“Female CEO gaming tech veteran of 25 years”), name Sam White as CEO of MKL’s game studio, “cut costs immediately to zero cash burn within seven days”, invest $2 million into the company, cancel the $726,000 short term funding tranche, and “when we have completed the above and the stock price jumps… we’ll then raise money for value-add acquisitions that are earnings per share accretive”.

“I think we could agree that to date, it’s been nothing but an absolute disaster since listing. We’re here and dedicated to making every necessary change,” Yeend said in a letter to shareholders.

“I hate how these microcaps are almost an industry for people to just suck them dry with fees and seem to almost get away with it with no conscience, in-between asking shareholders for more and more money, diluting them to oblivion as MKL have done time and time again.

“We are confident in our ability to restore shareholder value expeditiously and prepared to be held to account to all MKL shareholders.”