Do you think Wall Street’s sharks would enjoy some chicken soup for the soul? Chicken Soup for the Soul Entertainment does: It just disclosed an SEC filing to launch an initial public offering hoping to raise $30 million with shares to trade on Nasdaq under the symbol CSSE.
It plans to sell 900,000 shares at $12 a share — but, if the demand warrants, the offering could go up to 2.5 million shares. It will use the cash to pay down debt, finance operations, and possibly for “strategic acquisitions, including acquiring video content distribution companies, assets and video content libraries,” the filing says.
Last week the SEC qualified CSSE to make a so-called Regulation A+ offering. It enables companies to raise up to $50 million from the public without the same disclosure or fee requirements required in larger IPOs.
The company has “an exclusive, perpetual and worldwide license” to create content using the brand name of the popular Chicken Soup for the Soul book series.
“We believe that increasing consumer demand for hopeful and enduring real life stories will continue to drive our growth,” it says in the filing. “We intend to continue to expand our content offerings and distribution capabilities at our current rapid pace in order to bring the positive Chicken Soup for the Soul message to as many people as possible.”
The company, founded in 2015, produced Chicken Soup for the Soul’s Hidden Heroes for CBS, and Project Dad for TLC network. It says that it also recently launched CSS Network: The company describes it as “our branded direct-to-consumer network” that will offer “original and third-party video content on a fee-per-view, subscription or advertising-supported basis.”
The arrangement could pay off for actor Ashton Kutcher. Last month he signed a three-year deal to serve as executive producer on two unscripted television series CSSE has in the works. The company gave him an undisclosed amount of its Class A stock, warrants to buy additional shares, and “a significant profit participation in the production and exploitation of the two series.”
He also owns 23% of A Plus Distribution, a short form video company that’s 75% owned by Chicken Soup for the Soul Digital. A Plus has a digital destination. APlus.com.
A Plus “has celebrity influencers such as Ashton Kutcher, Britney Spears, Lil Wayne and George Takei among many others with over 480 million combined followers,” CSSE says.
Those buying CSSE’s stock shouldn’t expect to have much influence on the company. The Class A shares come with one vote apiece. But CEO William Rouhana, Jr. — who’s chairman of Chicken Soup for the Soul Publishing — will control the Class B shares, with 10 votes apiece, which will leave him with 94.8% of the votes after the offering.
His wife, Amy Newmark — a former media and telecom analyst and investment banker — is a director as well as publisher and editor-in-chief of the Chicken Soup for the Soul books.
Investors should also have a high tolerance for risk: Last year TV sales swung CSSE to a $781,133 profit from a $753,463 loss in 2015. Revenues last year hit $8.1 million, up from $1.5 million.