Chicken Soup for the Soul Entertainment, the ailing parent of video kiosk operator Redbox and streaming services like Crackle and Popcornflix, has gotten rid of its entire board of directors.
The only remaining board member, the company said in an SEC filing late Monday, is chairman and CEO Bill Rouhana. The company’s investor relations website lists eight other board members including Rouhana’s wife, Amy Newmark. In addition to having been on the entertainment company’s board, Newmark is Publisher, Editor in Chief and Author at Chicken Soup for the Soul Holdings.
In the filing, the company revealed the move was made on June 11, in accordance with Delaware General Corporation Law. The law allows for “any director or the entire board may be removed, with or without cause, by the holders of a majority of the shares,” according to the filing, which was signed by CFO Jason Meier.
The company declined comment on the board exits when contacted by Deadline.
The holder of more than 75% of the voting power of the company’s common stock had taken the step, the filing explained, to remove without cause all members of the board of directors and the boards of each subsidiary. In a typical corporate governance structure, the board of directors acts as a check on a company’s management team, with oversight of executive compensation and the ability to scrutinize strategic plans or transactions.
CSSE, which went public in 2017 as a film and TV extension of the blockbuster self-help publishing brand, has grown via acquisitions of entities including Crackle, Screen Media, 1091 Pictures and Sonar Entertainment. While the filing does not identify the shareholder responsible for the board exits, Chicken Soup for the Soul Holdings, which controls the publishing rights to the namesake franchise as well as ancillary businesses like a pet food line, has accumulated a large stake in CSSE in recent months.
After CSSE closed its biggest M&A deal to date in mid-2022, a $375 million merger with video retailer Redbox, it staggered under the debt load of the transaction along with the impact of the 2023 strikes on the Hollywood film pipeline and ongoing changes to movie consumer habit. Its stock has traded below $1 a share for nearly a year, drawing a delisting warning from the Nasdaq. Filmmakers and consultants have filed lawsuits over what they say are unfulfilled contracts, and the company has faced the looming threat of bankruptcy, managing to stave it off by renegotiating certain debt repayments.
Earlier in the spring, the company said it had entered into an agreement allowing it to raise $175 million of additional working capital from two financing parties. The agreement also included a plan to make a $75 million loan prepayment under the company’s principal credit facility.
Shares in CSSE, which slid 6% during Monday’s regular trading session to close at a shade less than 29 cents, rebounded 3% after hours as word of the board action began to circulate.
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