Mighty Kingdom Limited Secures Debt Facility and Provides Business Update
MIGHTY KINGDOM LIMITED (MKL) Share Update December 2024 Monday 23rd
Mighty Kingdom Announces New Debt Facility and Business Update
Mighty Kingdom Limited (ASX: MKL) has announced a new secured debt facility of up to $1.2 million and provided updates on its ongoing business operations and future opportunities.
Instant Summary:
- Secured debt facility of up to $1.2 million for working capital.
- Current business operations are on track with profitability initiatives.
- New corporate opportunities are being actively pursued.
- Debt facility conversion subject to shareholder approval.
Business Operations Update
Mighty Kingdom Limited, a prominent player in the gaming industry, has provided an update on its current business operations. The company has confirmed that its ongoing contracts are being serviced effectively, with initiatives in place to drive profitability and minimize cash burn. Despite not proceeding with a previously proposed material acquisition and capital raising, MKL remains focused on enhancing shareholder value through new corporate opportunities.
Shareholders can expect additional updates in the short term regarding ongoing operations, potential new opportunities, and changes in board composition.
Debt Facility Details
The company has secured a debt facility of up to $1.2 million, aimed at meeting its working capital requirements. This facility is secured against R&D and DGTO rebates owed by the South Australian and Federal Government. The debt facility has garnered strong support from both existing and new investors, including participation from company directors. The issue was managed by Cerberus Advisory.
The commercial terms of the facility include a face value of up to $1.2 million, with a maturity date of 18 April 2025 or upon receipt of R&D and DGTO rebates, whichever comes first. The interest payable is set at 20% on the face value, which will be capitalized and added to the face value on drawdown. Conversion will occur via the issuance of shares at the lower of $0.02 or future equity raising price, subject to shareholder approvals.
The establishment of the debt facility is a strategic move to ensure Mighty Kingdom's liquidity and operational continuity. While the interest rate is relatively high, the facility provides the necessary capital to support ongoing initiatives and explore new opportunities. This could stabilize the company's stock in the short term, but the high interest rate may raise concerns among investors about future cash flow and profitability.
Investor Reaction:
Analysts are likely to view the debt facility as a positive step towards maintaining financial stability. However, the high interest rate might be a point of concern, potentially affecting investor sentiment. The company's decision to not proceed with the material acquisition may also lead to mixed reactions, depending on investor expectations for growth and expansion.
Conclusion:
Investors should keep an eye on upcoming announcements from Mighty Kingdom regarding new opportunities and board changes. The secured debt facility provides a buffer for the company's operations, but careful monitoring of financial performance and strategic moves will be crucial for long-term confidence.