SEC Form SC 13D/A filed by Chicken Soup for the Soul Entertainment Inc. (Amendment)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

(Amendment No. 1)

Chicken Soup for the Soul Entertainment, Inc.

(Name of Issuer)

Class A Common stock, par value $0.0001 per share

(Title of Class of Securities)

16842Q 100

(CUSIP Number)

William J. Rouhana, Jr.

Chicken Soup for the Soul Entertainment, Inc.

132 E. Putnam Avenue, Floor 2W

Cos Cob, Connecticut 06807

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

April 3, 2023

(Date of Event which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D/A, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.    ☐

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D/A

This amendment to Schedule 13D (“Schedule 13D/A”) is filed by Chicken Soup for the Soul Holdings, LLC (“Holdings”), Chicken Soup for the Soul, LLC (“CSS”) and William J. Rouhana, Jr. with respect to ownership of shares of Class A common stock, par value $0.0001 (the “Class A Common Stock”) of Chicken Soup for the Soul Entertainment, Inc., a Delaware corporation (the “Issuer”).

The percentage of beneficial ownership reflected in this Schedule 13D/A is based upon 27,540,923 shares of Common Stock outstanding, comprised of 19,886,418 shares of Class A Common Stock and 7,654,505 shares of Class B common stock (“Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”) outstanding as of April 3, 2023. The Class B Common Stock is convertible at any time into Class A Common Stock on a one for one basis. The Class A and Class B Common Stock vote as a single class, however, each share of Class A Common Stock has one vote and each share of Class B Common Stock (prior to conversion into Class A Common Stock) has ten votes.

The class of equity securities to which this Schedule 13D/A relates is the Class A Common Stock of the Issuer. The Issuer’s principal executive offices are located at 132 E. Putnam Avenue, Floor 2W, Cos Cob, Connecticut 06807.

The business address of each of Holdings, CSS and Mr. Rouhana is 132 E. Putnam Avenue, Floor 2W, Cos Cob, Connecticut 06807. Holdings is the ultimate parent of CSS. Holdings is ultimately controlled by Mr. Rouhana.

None of Holdings, CSS or Mr. Rouhana have, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

None of Holdings, CSS or Mr. Rouhana have, during the past five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Each of Holdings and CSS is a Connecticut limited liability company. Mr. Rouhana is a citizen of the United States.

The source of the funds used by Mr. Rouhana to acquire the shares of common stock in the Issuer’s underwritten public offering consummated on April 3, 2023 and reported on in this Schedule 13D/A was personal funds.

The source of the funds used by CSS to acquire the shares of common stock was the exchange of cash fees owed for the first quarter of 2023 under the terms of the Issuer’s management services agreement and license agreement with the Issuer at a price of $3.05 per share, as such agreements have been modified by the CSSE Agreements Modification thereto reported by the Issuer in (and filed as an exhibit to) the Current Report filed with the SEC on March 30, 2023.

See also Item 4 of this Schedule 13D/A, which information is incorporated herein by reference.

The acquisitions reported on in this Schedule 13D/A were made for investment purposes. Holdings, CSS and Mr. Rouhana may acquire or dispose of additional securities or sell securities of the Issuer from time to time in the market or in private transactions. Except as described herein, none of Holdings, CSS or Mr. Rouhana has any other agreements to acquire additional shares of Common Stock at this time. As Chief Executive Officer and Chairman of the Issuer’s Board of Directors, Mr. Rouhana is involved in making material business decisions regarding the Issuer’s policies and practices and may be involved in the consideration of various proposals considered by the Issuer’s Board of Directors. Except as discussed above, none of Holdings, CSS or Mr. Rouhana have any plans or proposals to acquire or dispose of securities of the Issuer, effect an extraordinary corporate transaction, such as a merger, reorganization or liquidation involving the Issuer or any of its subsidiaries, cause a sale or transfer of a material amount of the assets of the Issuer or any of its subsidiaries, cause any material change in the present capitalization or dividend policy of the Issuer, cause a change in the present board of directors or management of the Issuer, cause any other material change in the Issuer’s business or corporate structure, cause any changes in the Issuer’s charter or bylaws or other actions that may impede the acquisition of control of the Issuer by any person, cause a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted on an inter-dealer quotation system of a registered national securities association, cause a class of equity securities of the Issuer to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, or take any other action similar to any of those enumerated above.

(a)-(b) The aggregate number and percentage of Common Stock beneficially owned by Mr. Rouhana (on the basis of a total of 27,540,923 shares of Common Stock outstanding as of April 3, 2023) are as follows:

(c)       Mr. Rouhana is the beneficial owner of 10,962,601 shares, or approximately 39.6%, of the Issuer’s outstanding Common Stock. This amount represents the 10,428,669 shares, or approximately 37.9%, of the Issuer’s outstanding Common Stock beneficially owned by Holdings and 533,932 shares, or approximately 1.9%, of the Issuer’s Common Stock beneficially owned by Mr. Rouhana, individually. Mr. Rouhana is the chief executive officer of Holdings and CSS, as such, Mr. Rouhana may be deemed to beneficially own such shares. Mr. Rouhana has sole voting and dispositive power over such shares.

(d)       Not applicable.

(e)       Not applicable.

On March 30, 2023, the Issuer entered into the CSS Agreements Modification with CSS, pursuant to which (a) $3.45 million of the aggregate fees under the CSS Management Agreement and CSS License Agreement that have been earned by CSS in the first quarter of 2023 and (b) 25% (or $12.75 million) of the next $51 million of such fees that will be earned by CSS on and after April 1, 2023 shall be paid through the issuance by the Issuer of shares of the Issuer’s Class A common stock. The shares payable with respect to clause (a), above, shall be paid promptly following the execution of the CSS Agreements Modification. The shares that shall become issuable in the future under clause (b) shall be issued each fiscal quarter as such fees are earned. The shares shall be valued at the higher of (a) $3.05 (which was the highest of the closing price (as reflected on Nasdaq.com) of the Issuer’s Class A common stock on the trading day immediately preceding the signing of the modification, and the average closing price of the Issuer’s Class A common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the modification), and (b) the average closing price of the Issuer’s Class A common stock (as reflected on Nasdaq.com) for the five trading days immediately following the filing of the Company’s 10-K for the year ended December 31, 2022. See the Company’s Current Report filed with the SEC on March 30, 2023.

On March 31, 2023, Chicken Soup for the Soul Entertainment, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC as sole managing underwriter (the “Underwriter”), for an underwritten public offering of 4,688,015 shares (the “Shares”) of the Company’s Class A common stock, $0.0001 par value per share (the “Common Stock”, such offering the “Offering”). The closing of the Offering took place on April 3, 2023. All of the Shares were sold by the Company. The price per Share in the Offering was $2.30 (the “Offering Price”). The net proceeds to the Company from the Offering were approximately $10.1 million, including approximately $3.8 million from sales made to the Company’s parent company, Chicken Soup for the Soul, LLC (“CSS”) and after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. CSS paid the Offering Price for the Shares it purchased in the Offering. No underwriting discount applied to the Shares purchased by CSS. The Offering was made pursuant to a shelf registration statement on Form S-3 that was filed with the Securities and Exchange Commission (“SEC”) on June 14, 2021, and declared effective by the SEC on June 24, 2021 (File No. 333-257057). A prospectus supplement relating to the Offering has been filed with the SEC. See the Company’s Current Report filed with the SEC on April 4, 2023.

Signatures

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.