Chicken Soup For the Soul Entertainment last week received a notice of “self-determination” from the Nasdaq stock exchange informing the troubled company that it's being delisted, according to an 8-K filing made to the SEC.
Chicken Soup's stock price dropped below $1 a share back in August. With its stock relegated to junk bond status for 30 consecutive days, the company was notified by Nasdaq in September that it had 180 days to return to compliance, or it would face delisting.
As of Monday, Chicken Soup was trading at just 15 cents a share. It hasn't been valued at more than $1 per share since August 14.
Asked for comment, a Chicken Soup rep referred Next TV to this passage in the company's 8-K filing:
"The Company may appeal the Staff Determination by filing a hearing request with Nasdaq on or before April 1, 2024, pursuant to the procedures set forth in the Nasdaq Listing Rules 5800 Series."
Back in December, Chicken Soup confessed in a 10-Q filing that there was “substantial doubt" that it could “continue as a going concern.”
For investors, that Q3 filing contained little but bad news: Net losses swelled to $433.4 million vs. just $20.1 million a year prior. The increase was mostly the result of a one-time impairment charge related to Chicken Soup's May 2022 purchase of Redbox, during which Chicken Soup assumed $325 million in debt.
Chicken Soup hasn't yet filed a 10-Q for Q4.
The company, which operates Crackle and a number of other streaming video ventures, took on that $325 million in debt in May 2022 when it acquired DVD rental kiosk giant Redbox, and that move hasn't worked out well at all.
As detailed by Janko Roettgers in his newsletter Lowpass last month, Redbox has shuttered around 8,000 kiosks recently, about a quarter of its base, and Chicken Soup is too cash-crunched to secure discs for the machines.
Redbox has been sued recently by a number of unpaid content providers, including NBCUniversal, which claims it hasn't been paid DVD royalties since June 2022.
Redbox is also being sued by retailers that feature its kiosks, including CVS, which claims it's owed $424,000 by the company.
On Monday, Business Insider wrote what amounts to a long-form obituary for Chicken Soup, with writer Amanda Chicago Lewis recounting her early experiences with the seminal Chicken Soup For the Soul self-help book enterprise. Lewis walks readers through current CEO William Rouhana's takeover and expansion of the company, and all the way to where a Canadian day trader identified as “Kevin” used Reddit to hype Redbox stock into a mind of miniature GameStop phenomenon.
