Chicken Soup for the Soul Entertainment, Inc., a fast-growing provider of positive and entertaining video content, has filed with the Securities and Exchange Commission a Form 8-K/A, as required, updating the Form 8-K filed on November 6, 2017 and providing audited and additional financial information relating to CSS Entertainment’s acquisition of Screen Media Ventures, LLC (“Screen Media”).
The value of all the recently acquired assets, as set forth in an independent, third-party valuation opinion dated January 11, 2018 (the “Valuation Opinion”), is approximately $31.4 million. The Valuation Opinion places a value on the Popcornflix direct-to-consumer online video service and associated content rights and the Screen Media TV and film library assets of approximately $27.9 million.
“Screen Media is comprised of an extraordinary collection of assets,” said William J. Rouhana, Jr., chairman and chief executive officer. “We are extremely fortunate to have had the opportunity to acquire these assets at such a substantial discount not only to their appraised value, but also to their intrinsic value and replacement cost.”
Reflecting the excess of the net appraised value of the assets over their purchase price as set forth in the Valuation Opinion, CSS Entertainment will recognize a non-cash gain in its Statement of Operations for the year ended December 31, 2017 of approximately $22.2 million.
“The appraised value of the Screen Media assets substantially exceeds our initial estimates,” stated Scott W. Seaton, vice chairman and chief strategy officer. “Consistent with our prior expectations, Screen Media generated more than $12 million in net revenue and $5 million in Adjusted EBITDA in 2017. We anticipate Screen Media’s 2018 net revenue and Adjusted EBITDA to substantially exceed its 2017 results.”
Mr. Rouhana added, “We continue to pursue additional transformative opportunities that would complement our growing portfolio of assets and further drive growth in revenues, profits and shareholder value.”
The Popcornflix direct-to-consumer online video service is comprised of five ad-supported networks with rights to over 3,000 films and approximately 60 television series (representing approximately 1,500 episodes) and is available in 56 countries. The Popcornflix app has been downloaded approximately 25 million times and has approximately 15 million active users.
The Screen Media content library is comprised of over 1,200 television series and feature films and is one of the largest, independently-owned libraries of filmed entertainment in the world. Through direct worldwide relationships, this content is distributed across all media, including theatrical, home video, pay-per-view, free cable and paid television, video-on-demand and existing and emerging video platforms.