Chicken Soup for the Soul stumbles as losses mount


US-based programmer Chicken Soup for the Soul has failed to file its Q1 form 10-Q with the country’s Securities and Exchange Commission (SEC) because preparing the document “would have diverted the attention of the Company’s management from certain important strategic efforts it has been undertaking including and in connection with the Forbearance Agreement with its largest creditor”.

In a notification of late filing submitted to the SEC, the company went on to explain that “such strategic undertakings have required a significant amount of management’s time that was to have been utilized for the preparation of the Form 10-Q. As a result, the Company requires additional time to complete analysis relating to its quarter-end financial reporting processes and compile and verify the data required to be included in the Form 10-Q”.

In the same notice, Chicken Soup for the Soul said, that, “due to insufficient working capital and lack of new content in 2024”, its net revenue for the quarter in question is expected to plummet from US$82 million to US$27 million, generating a net loss to shareholders of US$53 million.

Chicken Soup for the Soul had previously reported being unable to file its 10-K form for the year-ending December 2023, citing that submitting on time would have diverted management’s attention “from certain important strategic efforts” as well as “turnover of key personnel in the accounting and reporting functions of the company”.

In that filing, the company said that “lower than expected” performance related to the Redbox kiosk rentals business it acquired in 2022, and an impairment charge of US$381 million, meant that full year revenues would be only US$294 million, implying a net loss of US$600 million.

At the end of April Chicken Soup for the Soul entered an agreement to raise US$175 million of additional working capital prior to June 6 that would allow it to make a US$75 million loan prepayment, conditional on its being able to sublicense content assets and consummate a sales leaseback deal, with total proceeds to be at least US$175 million.

Chicken Soup for the Soul acquired retail kiosk outfit Redbox in 2022 in a US$375 million deal, which it said at the time would expand its footprint in the growing FAST space.


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