Chicken Soup for the Soul Entertainment, which lost $43.7 million in this year’s second quarter, has been notified that it is in danger of being delisted by Nasdaq because its stock price as of Sept. 21 had remained below the required $1 per share for 30 days.
The company notified the Securities and Exchange Commission in a filing late last week.
Chicken Soup for the Soul is one of the largest advertising-supported video-on-demand (AVOD) companies in the U.S., with three flagship AVOD streaming services: Redbox, Crackle and Chicken Soup for the Soul. In addition, the company operates free, ad-supported/FAST service Redbox Free Live TV, a transaction video on demand (TVOD) service, and the Redbox network of 31,000 U.S. kiosks for DVD rentals.
The company has been struggling financially in the face of increased competition in a soft advertising market on top of having paid $50 million and assumed $325 million in debt to acquire Redbox in August 2022. Its debt more than doubled between Q2 2022 and Q2 2023.
This past August, when Q2 results were released, CEO William J. Rouhana announced that the company was conducting a strategic review.
The new SEC filing again confirms that the company is exploring strategic transactions, including a sale of the company or some assets, and is in “active discussions with respect to potential transactions.”
In recent months, the company has made a rapid series of moves aimed at increasing its revenue.
In April, it formed an ad-selling platform, Crackle Connex.
Since then, Crackle Connex has added video ad services for publishers through integrations with Amazon; TikTok content and advertising have been added to Redbox video kiosks; RedBox’s rewards program has been expanded beyond movie rental kiosks, to apply to titles rented or purchased online; the Chicken Soup FAST has been launched on Philo; and Crackle Connex has announced a deal with TransUnion to offer custom audiences and develop ways to retarget viewers of connected TV campaigns on Chicken Soup-owned Redbox kiosks.
The company hopes to see some benefit from Netflix’s shutdown of its mailed DVDs business.