As of April 1, board game designer and publisher CMON has frozen all trading of its shares on the Hong Kong stock exchange. CMON has yet to publish its financial report for the year ending December 2024, and can’t trade on the exchange until it does – but legal complications of an earlier deal may stand in the way.
CMON is well known to tabletop gamers for its massive, miniature-packed board games, from dungeon crawlers like Zombicide to strategy board games like Blood Rage. Shares in the firm have traded on the Stock Exchange of Hong Kong (HKEX) since 2017, with outstanding shares currently worth $5.57 million (HKD $43.34 million).
CMON warned investors on March 25 that it would be late to publish its annual returns for the previous financial year. This puts it in breach of the rules for companies listing shares on the HKEX, which require firms to publish their audited financial statements regularly so that investors can make informed decisions about the likely future value of their shares. On April 1 it confirmed that share trading was suspended.
In the March 25 statement, CMON attributed the delay in compiling its report to two main factors. First, “there were changes in certain key personnels in the financial department”, meaning the firm’s “financial department is understaff as [CMON] is still looking for replacements”. In addition, the firm stated it was “pursuing legal guidance” to try and resolve a deal gone bad.
On April 13 2024, CMON entered into a Share Subscription agreement with investors Drum Group Limited and Mana Pool Investments Limited. This was set to create new shares and sell them to the firms for a total of $1.34 million (HKD $10.4 million). Once the sale was complete, each firm would hold 8.33% of the total shares in CMON.
But in another statement to investors on March 5 this year, CMON announced that the deal had hit an impasse. CMON is apparently still holding onto the shares because, “as at the date of this announcement, the Company has still not received… the sum of HK$10.4 million from the Subscribers”. The firm adds that the shares “were issued in physical form and kept in the custody of [CMON] and were not delivered to the Subscribers at all material times”.
CMON’s most recent prediction about its financial results for 2024 are bad. On March 12 it gave investors the dire news that, based on its preliminary, unaudited accounts, the firm expected the year to show a loss somewhere between $1.4 million and $2.1 million, down catastrophically from the previous year’s $0.8 million profit. This would be a major blow – the firm’s annual financial report for 2023 shows that it ended the year with $3.179 million in cash and equivalents in its bank accounts.
The firm states in its March 25 announcement that “it would not be appropriate for the Company to publish the unaudited consolidated management accounts” as they “may not accurately reflect the financial performance and/or position of the Group” which “may be misleading to the Shareholders and potential investors of the Company”. The real books could be much better or much worse.
This isn’t the only bad news in CMON’s recent reports to shareholders. On 28 February the firm announced that a deal to sell some of its intellectual properties had fallen through. The non-binding agreement with an undisclosed third party was originally announced back in August 5 2024, and would have secured $12 million (HKD $93 million).
The firm has made extensive use of pre-orders and Kickstarter to crowdfund games, and has outstanding commitments on multiple projects. At the time of writing, the firm’s own tracking pages list five games that customers have already paid for which are currently being manufactured, two in shipping, and a further ten in earlier stages of pre-production. These are mostly big bulky board games packed with miniatures and premium components.
While there aren’t any CMON games on Wargamer’s guide to the best board games, that’s a reflection on the strength of the field, not a sign that CMON’s lineup is lacking. Far from it: the firm produces some great titles with extremely high production values, such as the gorgeous current edition of Reiner Knizia’s auction game Modern Art, real time action strategy game Project Elite, and classic bluffing game Sheriff of Nottingham.
Source: Wargamer
