Chicken Soup for the Soul Entertainment Inc. (NASDAQ:CSSE) has experienced a significant change in its board of directors, according to a recent SEC filing. On Monday, the company disclosed that a majority shareholder, wielding over 75% of the voting power, utilized their rights under Delaware law to remove all members of the board, with the exception of William J. Rouhana Jr.
The shareholder's action, taken on June 11, effectively ousted the directors without cause. This dramatic shift comes amid a period of unspecified challenges or changes within the company. The filing did not detail the reasons behind the removal or any plans for appointing new directors to fill the vacancies.
Chicken Soup for the Soul Entertainment, based in Cos Cob, Connecticut, operates within the entertainment sector, specifically allied to motion picture production. The company is known for its focus on positive storytelling and family-friendly content.
The remaining board member, William J. Rouhana Jr., is also the current chairman and CEO of the company. The impact of this board restructuring on the company's strategy and operations is yet to be seen.
The recent board changes are a reminder of the significant influence that majority shareholders can wield within publicly traded companies, especially when it comes to governance and oversight.
In other recent news, Chicken Soup for the Soul Entertainment Inc., known for its streaming services Redbox, Crackle, and Chicken Soup for the Soul, faced a potential delisting from the Nasdaq Capital Market due to noncompliance. This was brought about by the delayed filing of its annual report for the fiscal year ended December 31, 2023. The company has since filed its overdue 2023 Annual Report on Form 10-K, rectifying the delinquency, and plans to request a stay of the suspension to maintain its listing. An appeals hearing is scheduled to discuss the company's plan for regaining compliance.
In the midst of these developments, the company continues to expand its content offerings through its subsidiaries, Screen Media and Chicken Soup for the Soul TV Group. These subsidiaries create, acquire, and distribute films and TV series. Additionally, Chicken Soup for the Soul Entertainment operates a network of approximately 27,800 kiosks throughout the U.S. for DVD rentals and offers a transactional video on demand service. These are some of the recent developments in the company.
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