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Redbox Owner CSSE Posts $636.6 Million Loss in 2023 Despite Big Gains in Kiosk Rental, Licensing Revenue

Redbox Owner CSSE Posts $636.6 Million Loss in 2023 Despite Big Gains in Kiosk Rental, Licensing Revenue

Chicken Soup for the Soul Entertainment, owner and operator of Redbox DVD rental kiosks and related VOD and ad-supported VOD channels, posted a net loss of $636.6 million on revenue of $294.4 million in 2023, widened from a net loss of $111.3 million on revenue of $252.8 million in 2022, according to an April 19 fiscal 10K regulatory filing.

CSSE, which operates about 40,000 Redbox kiosks nationwide after acquiring the brand in August 2022, reported that the kiosk business saw a 66% increase in revenue to $112.7 million, from revenue of $67.7 million in 2022. VOD revenue declined 28% to $104 million, from $144.5 million in 2022. Licensing revenue increased 91% to $77.6 million, from $40.6 million in 2022.

CSSE reported that it ended 2023 with fiscal debt of $562.4 million, which includes outstanding credit facilities and bond debt.

In the report, CSSE said it does not currently have “adequate sources of liquidity” to meet its anticipated requirements for working capital, capital expenditures, cash dividend payments on its 9.75% Series A preferred stock, and cash interest payments on outstanding bond notes, credit facilities, and other debt obligations.

Indeed, CSSE said the reduced the liquidity would contribute an expected “lower level of kiosk rentals into the future” until it could afford to stock DVD titles “of consequence” on a consistent basis.

“The inability to obtain additional financing resources, will likely require us to diminish or halt operations and seek protection under applicable bankruptcy laws,” read the 10K report.

Also in the filing, CSSE said it had entered into a “mutual forbearance period” with its principal lender, giving it upwards of 60 days to pursue separate fiscal transactions, which include a $50 million sublicense agreement, a $125 million deal with a third party comprised of a $65 million line of credit and a $60 million equipment lease to Redbox secured by assets owned by the kiosk rental company.

The forbearance prohibits the lender from “exercising any [fiscal] remedies” against CSSE under previous terms of the credit facility.

Earlier this month CSSE, in a separate regulatory filing, said it would make a special payment on April 30 of more than $1.07 million due for accrued and unpaid interest that was previously owed to a bond holder.

The company is also seeking an extension with the Nasdaq to regain $1-per-share minimum compliance for its publicly traded stock. CSSE shares are currently trading around 14 cents per share.

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