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Item 1. Business

2025-03-31 compared with 2024-04-09 · 410 added, 176 removed, 33 unchanged (95% of the section changed)

Kartoon Studios, Inc.

(formerly known as Genius Brands International, Inc.) (the “Company” or “we,” “us” or “our”) is a global content and brand management company that creates, produces, licenses, and broadcasts timeless and educational, multimedia animated content for children.

Led by experienced industry personnel, we distribute our content primarily on streaming platforms and television, and licenses properties for a broad range of consumer products based on our characters.

We are a “work for hire” producer for many of the streaming outlets and animated content intellectual property (“IP”) holders.

In the children’s media sector, our portfolio features “content with a purpose” for toddlers to tweens, providing enrichment as well as entertainment.

With the exception of selected WOW Unlimited Media Inc.

(“Wow”) titles, our programs, along with licensed programs, are being broadcast in the United States on our wholly-owned advertisement supported video on demand (“AVOD”) service, our free ad supported TV (“FAST”) channels and subscription video on demand (“SVOD”) outlets, Kartoon Channel!

known as Genius Brands International, Inc.) (the “Company” or “we,” “us” or “our”) is

a global content and brand management company that creates, produces, licenses, and broadcasts educational, multimedia animated content

for children.

Led by experienced industry personnel, we distribute our content primarily on streaming platforms and television, and license

properties for a broad range of consumer products based on our characters.

We are a “work for hire” producer for many of the

streaming outlets and animated content intellectual property (“IP”) holders.

In the children’s media sector, our portfolio

features “content with a purpose” for toddlers to tweens, providing enrichment as well as entertainment.

With the exception

of selected WOW Unlimited Media Inc.

(“Wow”) titles, our programs, along with licensed programs, are being broadcast in the

United States on our wholly-owned advertisement supported video on demand (“AVOD”) service, our

free ad supported TV (“FAST”) channels and subscription video on demand (“SVOD”) outlets, Kartoon Channel!

and Ameba TV, as well as linear streaming platforms .

These streaming platforms include Comcast, Cox, DISH, Sling TV, Amazon Prime Video, Amazon Fire, Roku, Apple TV, Apple iOS, Android TV, Android mobile, Pluto TV, Xumo, Tubi, YouTube, YouTube Kids and via KartoonChannel.com, as well as Samsung and LG smart TVs.

Our in-house owned and produced animated shows include Stan Lee’s Superhero Kindergarten starring Arnold Schwarzenegger, Llama Llama starring Jennifer Garner, Rainbow Rangers, KC Pop Quiz and Shaq’s Garage starring Shaquille O’Neal.

Our library titles include the award-winning Baby Genius , adventure comedy Thomas Edison’s Secret Lab®, and Warren Buffett’s Secret Millionaires Club , created with and starring iconic investor Warren Buffett, Team Zenko Go!, Reboot , Bee & PuppyCat:

Lazy in Space and Castlevania .

We also license our programs to other services worldwide, in addition to the operation of our own channels, including, but not limited to, Netflix, Paramount+, Max, Nickelodeon, and satellite, cable and terrestrial broadcasters around the world.

Through our investments in Germany’s Your Family Entertainment AG (“YFE”), a publicly traded company on the Frankfurt Stock Exchange (RTV-Frankfurt), we have gained access to one of the largest animation catalogues in Europe with over 50 titles consisting of over 1,600 episodes, and a global distribution network which currently covers over 60 territories worldwide.

Through the ownership of WOW, we established an affiliate relationship with Mainframe Studios, which is one of the largest animation producers in the world.

In addition, Wow owns Frederator Networks Inc.

(“Frederator”) and its Channel Frederator Network , the largest animation focused multi-channel network on YouTube with over 2,500 channels.

Frederator also owns Frederator Studios, focused on developing and producing shorts and series for and with partners.

Over the past 20 years, Frederator Studios has partnered with Nickelodeon, Nick Jr., Netflix, Sony Pictures Animation and Amazon.

We have rights to a select amount of valuable IP, including among them a controlling interest in Stan Lee Universe, LLC (“SLU”), through which we control the name, likeness, signature, and all consumer product and IP rights to Stan Lee (the “Stan Lee Assets”).

We also own The Beacon Media Group, LLC (“Beacon Media”) and The Beacon Communications Group, Ltd.

(“Beacon Communications”) (collectively, “Beacon”), a leading North American marketing and media agency and its first-class media research, planning and buying division.

Beacon represents over 30 kids and family clients, including Bandai Namco, Moose Toys, Bazooka Candy Brands and Playmobil.

In addition, we own the Canadian company Ameba Inc.

(“Ameba”), which distributes SVOD service for kids and has become a focal point of revenue for TOON Media Networks’ subscription offering.

On June 23, 2023, we were renamed Kartoon Studios, Inc.

On June 26, 2023, we transferred our listing to NYSE American LLC (“NYSE American”).

In connection with listing on NYSE American, we voluntarily delisted from the Nasdaq Capital Market (“Nasdaq”).

These streaming platforms include Comcast, Cox, DISH, Sling TV, Amazon Prime Video, Amazon Fire, Roku, Apple TV, Apple iOS, Android

TV, Android mobile, Pluto TV, Xumo, Tubi, YouTube, YouTube Kids, and Samsung and LG smart TVs.

Our in-house owned and produced animated

shows include Stan Lee’s Superhero Kindergarten starring Arnold Schwarzenegger, Llama Llama starring Jennifer Garner,

Rainbow Rangers, KC!

Pop Quiz and Shaq’s Garage starring Shaquille O’Neal.

Our library titles include the award-winning

Baby Genius , adventure comedy Thomas Edison’s Secret Lab®, and Warren Buffett’s Secret Millionaires Club ,

created with and starring iconic investor Warren Buffett, Team Zenko Go!, Reboot , Bee & PuppyCat:

Lazy in Space and

Castlevania .

In addition to operating our

own channels, we license our programs to other services worldwide, including Netflix, Paramount+, Max, Nickelodeon, and satellite, cable

and terrestrial broadcasters around the world.

Through our investments in

Germany’s Your Family Entertainment AG (“YFE”), a publicly traded company on the Frankfurt Stock Exchange (RTV-Frankfurt),

we have gained access to a leading producer and distributor of high-quality children’s and family programming.

YFE owns and operates

one of Europe’s largest channel-independent libraries of around 150 titles and 3,500 half-hour episodes.

Through the ownership of WOW,

we established an affiliate relationship with Mainframe Studios, which is one of the largest animation producers in the world.

Wow owns Frederator Networks Inc.

(“Frederator”) and its Channel Frederator Network , the largest animation focused

creator network on YouTube with over 2,500 channels.

Frederator also owns Frederator Studios, focused on developing and producing shorts

and series for and with partners.

Over the past 20 years, Frederator Studios has partnered with Cartoon Network, Nickelodeon, Nick Jr.,

Netflix, Sony Pictures Animation and Amazon.

We have rights to certain

select valuable IP, through our ownership of a controlling interest in Stan Lee Universe, LLC (“SLU”), an entity we control

and through which we control the name, likeness, signature, and all consumer product and IP rights to Stan Lee (the “Stan Lee Assets”).

The Company also owns The

Beacon Media Group, LLC (“Beacon Media”) and The Beacon Communications Group, Ltd.

(“Beacon Communications”) (collectively,

“Beacon”), a leading North American media and marketing agency, celebrated for its innovative, tailored strategies and unmatched

expertise in reaching kids, parents, and families with precision and impact.

Beacon represents over 20 kids and family clients, including

Bandai Namco, Moose Toys, Bazooka Brands, Goliath Games, Playmates Toys, Cepia LLC, and Zebra Pens.

In addition, we own the Canadian

company Ameba Inc.

(“Ameba”), which operates a premier subscription-based streaming service specializing in younger children’s

entertainment.

As a cornerstone of our subscription offerings, Ameba delivers a vast library of engaging and educational content, accessible

across multiple platforms.

We believe, that Ameba significantly enhances our digital footprint and revenue streams.

On June 23, 2023, we changed

our name from Genius Brands International, Inc.

to Kartoon Studios, Inc.

through our merger with and into our wholly owned subsidiary.

On June 26, 2023, we transferred the listing of our common stock from the Nasdaq Capital Market (“Nasdaq”) to NYSE American

LLC (“NYSE American”).

In connection with listing on NYSE American, we voluntarily delisted our common stock from Nasdaq.

Our common stock began trading on NYSE American under the new symbol “TOON” on June 26, 2023.

Recent Developments

Exercise of 2021 Warrants and Issuance of New Warrants

On June 26, 2023, we entered into warrant exercise inducement offer letters (the “Letter Agreements”) with certain existing institutional and accredited investors pursuant to which such investors agreed to exercise for cash certain warrants issued by us in January 2021 (the “2021 Warrants”) to purchase 2,311,550 shares of common stock (the “Exercise”).

To induce the Exercise by holders of the 2021 Warrants, we also amended the exercise price of the 2021 Warrants from $23.70 per share (as adjusted pursuant to a 1-for-10 reverse stock split of our outstanding shares of common stock effected on February 10, 2023) to $2.50 per share pursuant to the terms of the 2021 Warrants.

In consideration for the Exercise, the exercising holders received warrants to purchase up to 4,623,100 shares of common stock, and The Special Equities Group, LLC, a division of Dawson James Securities, Inc.

(“SEG”) which acted as the warrant solicitation agent for the Exercise, received a warrant to purchase up to 161,809 shares of common stock (collectively, the “Warrants”).

The Warrants are exercisable at any time beginning on November 1, 2023 (i.e., the date stockholder approval was received as described therein) (the “Initial Exercise Date”) and ends on the fifth anniversary of the Initial Exercise Date at a price per share of $2.50.

Pursuant to the Letter Agreements, we filed a registration statement on Form S-3 covering the resale of the shares of common stock issuable upon the exercise of the Warrants on July 26, 2023.

Declaration of Series C Preferred Stock Dividend;

Redemption of Series C Preferred Stock

On September 21, 2023, our board of directors declared a dividend of one one-thousandth of a share of Series C Preferred Stock, par value $0.001 per share (“Series C Preferred Stock”), for each outstanding share of our common stock, par value $0.001 per share to stockholders of record on October 2, 2023 (the “Record Date”).

Each share of Series C Preferred Stock would entitle the holder thereof to 1,000,000 votes per share (and, for the avoidance of doubt, each fraction of a share of Series C Preferred Stock would have a ratable number of votes).

Thus, each one-thousandth of a share of Series C Preferred Stock would entitle the holder thereof to 1,000 votes.

The outstanding shares of Series C Preferred Stock would vote together with the outstanding shares of common stock as a single class exclusively with respect to the approval of the proposal (the “Share Increase Proposal”) to amend our Articles of Incorporation to increase the authorized shares of common stock from 40,000,000 shares to 190,000,000 shares with a corresponding increase in the total number of authorized shares of capital stock from 50,000,000 shares to 200,000,000 shares (the “Share Increase Amendment”) and any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Share Increase Amendment (the “Adjournment Proposal” and together with the Share Increase Proposal, the “Proposals”).

The Series C Preferred Stock would not be entitled to vote on any other matter, except to the extent required under Chapter 78 of the Nevada Revised Statues.

We held a special meeting of stockholders on November 1, 2023 (the “Special Meeting”), at which both Proposals were approved by the stockholders.

All shares of Series C Preferred Stock that had not been duly voted by proxy prior to the opening of the Special Meeting were automatically redeemed in whole, but not in part, by the Company as of immediately prior to the opening of such meeting.

Any outstanding shares of Series C Preferred Stock that had not been redeemed prior to the opening of the Special Meeting were redeemed in whole, but not in part, automatically upon the approval of the Share Increase Proposal by the stockholders.

Each share of Series C Preferred Stock was redeemed in consideration for the right to receive an amount equal to $0.01 in cash for each ten whole shares of Series C Preferred Stock that had been held as of immediately prior to the applicable redemption.

However, the redemption consideration in respect of the shares of Series C Preferred Stock (or fractions thereof) was only payable to such owners on the number of shares owned and redeemed pursuant to the redemptions rounded down to the nearest whole number that is a multiple of ten (such, that for example, an owner of 25 shares of Series C Preferred Stock redeemed was entitled to receive cash payment only on redemption of 20 shares of Series C Preferred Stock).

During 2023, we produced numerous owned IP and for-hire projects including:

Recent Development

April 2024 Offering

On April 23, 2024,

pursuant to the terms of a securities purchase agreement, dated April 18, 2024 (the “SPA”), we closed a registered

direct offering of the sale of 3,900,000 shares of our common stock, par value $0.001 per share (the “Common Stock”),

and pre-funded warrants to purchase up to 100,000 shares of Common Stock (the “Pre-funded Warrants”) to an institutional

investor (the "Investor"), at $1.00 per share of Common Stock and $0.99 per Pre-funded Warrant, for aggregate gross

proceeds of approximately $4,000,000, prior to deducting placement agent fees and other offering expenses.

Additionally, in

connection with the April 2024 Offering, the exercise price of certain warrants to purchase 4,784,909 shares of common stock,

previously issued by us in June 2023, was reduced from $2.50 per share to $1.00 per share pursuant to anti-dilution provisions

contained in such warrants.

"Winnie-the-Pooh” Project Financing

On June 21, 2024, we announced

the launch of “Winnie-the-Pooh” on the Kartoon Channel through a $30.0 million joint venture (the “JV”) with

Catalyst Venture Partners (“Catalyst”).

The binding term sheet governing the JV stipulates after Catalyst recoups its investment

with 10% premium, the ownership and profit split between the partners is 60% to Kartoon Studios and 40% to Catalyst Venture Partners.

“Winnie-the-Pooh” is based on the designs and stories of one of the most successful brands of all time, A.A.

“Winnie-the-Pooh,” a property that has generated over $80 billion in sales over the last four decades and is estimated

to currently generate $3-$6 billion per year.

Catalyst has agreed to provide the full amount of the production financing with the

plan to include an animated holiday movie, 5 holiday specials and 4 seasons of episodic series.

December 2024 Offering

On December 18, 2024, we closed

an offering (the “December 2024 Offering”) for aggregate gross proceeds of approximately $4,496,480 from one institutional

investor and issued to such investor 4,375,000 shares of common stock, pre-funded common stock purchase warrants to purchase up to 3,519,736

shares of common stock, Series A common stock purchase warrants to purchase up to 7,894,736 shares of common stock, and Series B common

stock purchase warrants to purchase up to 7,894,736 shares of common stock.

Each share of common stock and each pre-funded warrant was

issued together with one Series A warrant and one Series B warrant as part of an integrated offering.

The purchase price per share of

common stock, together with accompanying Series A and Series B warrants, was $0.57, while the purchase price per pre-funded warrant was

We incurred a placement agent fee of approximately $389,754 and issued warrants to purchase 1,657,895 shares of common stock to

the placement agent with an exercise price of $0.71 per share.

Following an analysis under applicable accounting guidance, we determined

that the pre-funded warrants and placement agent warrants met the criteria for equity classification, while the Series A and Series B

warrants required classification as liabilities due to settlement provisions requiring shareholder approval.

The liability-classified

warrants will be subsequently measured at fair value, with changes recognized in earnings.

In accordance with applicable accounting standards,

we allocated the total proceeds among the instruments issued, recognizing the warrants as a liability at their full fair value.

of this allocation, we recorded a non-cash loss of $1.0 million.

Executing the transaction was driven by several strategic considerations.

The capital injection strengthened our liquidity position, supporting project development and ongoing operations.

Additionally, while

the warrants resulted in a non-cash accounting loss due to their fair value measurement, they did not impact our cash flows.

our management believes, that the offering was beneficial from a market visibility perspective.

“Andrew The Big BIG Unicorn” Owned IP Project

On August 28, 2024, Mainframe

Studios, our affiliate, announced that it is co-producing Andrew the Big BIG Unicorn, an animated children’s series, in collaboration

with Pirate Size Productions (Australia) and Infinite Studios (Singapore/Indonesia).

The series (40 episodes, seven minutes each) is targeted

at preschool audiences and follows the adventures of a young rhino living as a very big unicorn.

The project is targeted for delivery

in March 2026.

The production is commissioned by ABC (Australia), CBC (Canada), and SRC (Canada), with Kartoon Studios retaining international

distribution, licensing, and merchandising rights.

The series will premiere on ABC Kids and ABC iview in Australia and on CBC Kids, Radio-Canada,

CBC Gem, and ICI TOU.TV in Canada.

The project reflects our ongoing commitment to expanding its global content production footprint and

leveraging strategic partnerships in key international markets.

During 2024, we produced numerous owned IP and

for-hire projects including:

Animated Series

Shaq’s Garage:

Shaq’s Garage production was completed on this animated IP series, starring and co-produced by NBA legend, Shaquille O’Neal, is a children’s animated series about the secret adventures of Shaquille’s extraordinary collection of cars, trucks, and other unique vehicles—the Shaq Pack.

Shaq’s Garage was launched on the Kartoon Channel!

during the second quarter of 2023.

Cocomelon specializes in 3D animation videos of both traditional nursery rhymes and original children's songs.

Mainframe produces content on a services basis for Moonbug Productions USA Inc.

and had delivered 52 x 3-minutes of animated shorts by the end of 2023 and the final 12 x 3-minutes of animated shorts are scheduled to be delivered by the end of the first quarter of 2024.

Eggventurers:

Eggventurers is a preschool animated series featuring a zany cast of egg characters who jump into grand engineering adventures, building spectacular chain reaction machines to help them overcome obstacles and achieve their goals.

During the first and second quarter of 2023, Mainframe completed delivery of 13 x 7-minute episodes and in the second half of 2023, delivered an additional 21 minutes of new animated content for GoldieBlox.

Barbie Productions:

throughout 2023, Mainframe produced and delivered several outstanding animated Barbie series, specials and shorts, including Barbie:

A Touch of Magic and Barbie and Stacie to the Rescue on a services basis for its longstanding client, Mattel.

Above & Beyond:

Octonauts is a children's television series based on the children's books written by Vicki Wong and Michael C.

The series is about a team of undersea explorers always ready to dive into action to explore new underwater worlds, rescue amazing sea creatures and protect the ocean.

Production of Seasons 6 through 8 of this animated title for Silvergate Media on a services basis continued at Mainframe throughout 2023, with final deliveries completed during the fourth quarter of 2023.

SuperKitties Season 2:

SuperKitties Su-Purr Charged is a top performing computer-generated animation show for Disney Junior.

Mainframe Studios produces this

content on a service basis for Sony TV Kids.

Through 2024, 42 11-minute episodes were delivered with the remaining 6 11-minute episodes

expected to be delivered in the first quarter of 2025.

In addition, ten supplementary animated shorts of 2 minutes were also delivered

The series was greenlit for a third season in February 2024, and Mainframe Studios started production on the third season in

second quarter of 2024, with delivery of episodes expected to commence the second quarter of 2025.

specializes in 3D animation videos of both traditional nursery rhymes and original children’s songs.

Mainframe Studios produces content

on a services basis for Moonbug Productions USA Inc.

and has completed delivery of 64 x 3 minutes of animated shorts in the first quarter

Phoebe & Jay:

2D Preschool series for PBS Kids, set to air in Fall 2025, began full production in 2024.

The series is designed to support early literacy

skills for preschoolers by showcasing the various kinds of texts they see in their everyday lives.

This has an overall order of 80 11-minute

episodes, with deliveries commencing the first quarter 2025 and finishing by the third quarter of 2026.

Unicorn Academy:

greenlit a second season of this children’s fantasy-adventure series from Spin Master Entertainment.

Mainframe Studios started production

on these 16 22-minute episodes in 2024 with delivery slated to begin during the third quarter of 2025 and to be completed in the first

quarter of 2026.

Roblox Rumble:

Kidaverse Roblox Rumble is an elimination-style competitive reality series featuring a diverse group of girls and boys across the United States, ages 8 to 12, who compete in 10 different Roblox games to win prizes and find out who is the ultimate gamer.

Kartoon Studios commenced production of this series in 2022 and completed production in 2023.

The series premiered on Kartoon Channel!

Roblox Rumble is an elimination-style competitive reality series featuring a diverse group of girls and boys across the United

States, ages 8 to 12, who compete in 10 different Roblox games to win prizes and find out who is the ultimate gamer.

Kartoon Studios commenced

production of this series in 2022 and completed production in 2023.

The series premiered on the company’s streaming service Kartoon

during March of 2023.

Spin Master Productions:

Mainframe produced on a services basis and completed delivery of several animated series, specials and shorts for Unicorn Academy, the fantasy-adventure children’s franchise that hit the Netflix Global Top 10 across three weeks.

Unicorn Academy was delivered to Spin Master Entertainment, a global Canadian toy and entertainment company.

Final deliveries were completed during the fourth quarter of 2023.

Licensed Content

In addition to the wholly owned or partially-owned properties listed above, we represent Llama Llama, Bee & PuppyCat and Castlevania in the licensing and consumer products sector of the market.

Consumer Products

A source of our revenue is our licensing and merchandising activities from our underlying intellectual property content.

We work directly in licensing properties to a variety of manufacturers and occasionally to retailers.

We currently have, across all brands, multiple licensees and hundreds of licensed products either in development, in market or scheduled to enter the market.

Products bearing our trademarks can be found in a wide variety of retail distribution outlets reaching consumers in retailers such as Wal-Mart, Target, Barnes & Noble, Kohl’s, Amazon.com, Hot Topic, Spirit, YOTTOY and many more.

License agreements that we enter into often include financial guarantees and commitments from the manufacturers guaranteeing a minimum stream of revenue for us.

As licensed merchandise is sold at retail, these advances and/or minimum guarantees can earn out, at which point we could earn additional revenue.

Today’s global marketplace and the manner in which content is consumed has evolved to a point where we believe there is only one viable strategy;

Kids today expect to be able to watch what they want whenever they want and wherever they want.

As such, content creators now must offer direct access on multiple fronts.

In September of 2024, Kartoon Studios launched a Roblox-based competition series for kids, which is

expected to premiere in the Spring of 2025 on Kartoon Channel!

Tapping into the game's massive audience, Roblox is played by over

30 million every day, the third season of Kidaverse Roblox Rumble is anticipated to have a global premiere in over 60 territories, including

North America, Asia, Europe, and The Middle East.

Consumer Products and Licensed Content

A source of our revenue is our licensing and merchandising

activities from our underlying intellectual property content.

We work directly in licensing properties to a variety of manufacturers and

occasionally to retailers.

We currently have, across all brands, multiple licensees and a variety of licensed products either in development,

in market or scheduled to enter the market.

Products bearing our trademarks can be found in a wide variety of retail distribution outlets

reaching consumers in retailers such as Barnes & Noble, Kohl’s, Amazon.com, and Hot Topic.

License agreements that we enter

into often include financial guarantees and commitments from the manufacturers guaranteeing a minimum stream of revenue for us.

cases, we can earn additional revenue once retail sales of licensed merchandise exceed the value of these advances or minimum guarantees.

Today’s global marketplace and the manner

in which content is consumed has evolved to a point where we believe there is only one viable strategy;

Kids today expect to

be able to watch what they want whenever they want and wherever they want.

As such, content creators now must offer direct access on multiple

This includes not only linear broadcast in key territories around the world but also across a multitude of digital platforms.

We have strong

relationships with and actively solicit placement for our content with major linear broadcasters, as well as on the digital side with Netflix, Comcast’s Xfinity platform, AppleTV, Roku, Samsung TV, Amazon Fire, Amazon Prime, Netflix, YouTube, Cox, Dish, Sling, Xumo, IOS, Android/Google Play, LG TV, Tubi, Pluto, Xbox and Connected TV.

We replicate this model of ubiquity around the world defining content distribution strategies by market that blends the best of linear, video on demand (“VOD”) and digital distribution.

We have strong relationships with and actively solicit placement for our content with major linear broadcasters, as well as on digital

platforms such as Netflix, Comcast’s Xfinity platform, AppleTV, Roku, Samsung TV, Amazon Fire, Amazon Prime, YouTube, Cox, Dish,

Sling, Xumo, iOS, Android/Google Play, Samsung and LG smart TVs, Tubi, Pluto, and Xbox.

We replicate this model of ubiquity around the

world seeking to craft a content distribution strategy for each market that blends the best of linear, video on demand (“VOD”)

and digital distribution.

Kartoon Channel!

In June 2020, we launched the Kartoon Channel!

, a digital family entertainment destination that delivers enduring childhood moments of humor, adventure, and discovery and is available across multiple AVOD, SVOD and linear streaming platforms, including Comcast, Cox, DISH, Sling TV, Amazon Prime Video, Amazon Fire, Roku, Apple TV, Apple iOS, Android TV, Android Mobile, Pluto TV, Xumo, Tubi and via KartoonChannel.com, as well as accessible via Samsung and LG smart TVs.

In June 2020, we launched

the Kartoon Channel!

is available in over 100 million U.S.

television households and on over 400 million devices, delivering numerous episodes of carefully curated family-friendly content.

The channel features animated classics for little kids, including “Peppa Pig Shorts,” “Mother Goose Club,” “Barney and Friends,” “Om Nom Stories,” as well as content for bigger kids, such as “Angry Birds,” “Talking Tom and Friends” and “Yu-Gi-Oh!” and original programming like “ Rainbow Rangers” and “ Stan Lee’s Superhero Kindergarten, ” starring Arnold Schwarzenegger.

, a digital family entertainment destination that delivers enduring childhood moments of humor, adventure,

and discovery and is available across multiple AVOD, SVOD and linear streaming platforms, including Comcast, Cox, DISH, Sling TV, Amazon

Prime Video, Amazon Fire, Roku, Apple TV, Apple iOS, Android TV, Android mobile, Pluto TV, Xumo, Tubi, YouTube, YouTube Kids, and Samsung

and LG smart TVs.

The Kartoon Channel!

also offers STEM-based content and Spanish language programming.

has achieved significant domestic penetration, being widely available to U.S.

households through Internet-based streaming services.

Kartoon Channel!

We have expanded the distribution footprint of Kartoon Channel!

to over 61 territories across Europe, the Middle East, Africa, Latin America and Asia by rolling out Kartoon Channel!

delivers numerous episodes of carefully curated family-friendly

content featuring animated classics for little kids, including “Peppa Pig Shorts,” “Mother Goose Club,” “Llama

Llama shorts,” “Om Nom Stories,” as well as content for bigger kids, such as “Angry Birds,” “Talking

Tom and Friends” and “Yu-Gi-Oh!” and original programming like “ Rainbow Rangers” and “ Stan

Lee’s Superhero Kindergarten, ” starring Arnold Schwarzenegger.

The Kartoon Channel!

also offers STEM-based content

and Spanish language programming.

Kartoon Channel!

Network Worldwide

We have expanded the distribution

footprint of Kartoon Channel!

to over 61 territories across Europe, the Middle East, Africa, and Asia by rolling out Kartoon

Pay TV, Branded block, and FAST services.

The channel includes the original Kartoon Channel!

programming, as well as the animated content from YFE’s animation catalogue.

programming, as well

as the animated content from YFE’s animation catalogue, plus content acquisitions.

Channel Frederator Network

Channel Frederator Network, owned by Frederator, is a multi-channel network that makes up the largest animation network on YouTube.

The multi-channel network has channels featuring over 2,000 exclusive creators and influencers, garnering billions of views annually.

We own the Canadian company Ameba Inc.

(“Ameba TV”), which distributes SVOD services for kids and has become a focal point of revenue for TOON Media Networks’ subscription offering.

Ameba TV provides a streaming service that is full of active, engaging and intelligent programming.

It is available across multiple platforms including Comcast, Cox, DISH, Sling TV, Amazon Prime Video, Amazon Fire, Roku, Apple TV, Apple iOS, Android TV, Android Mobile, Pluto TV, Xumo, Xbox and Tubi.

Ameba TV is available in the U.S.

and Canada and provides numerous hours of educational programming for children.

Ameba TV is comprised of 14,000+ episodes and 2,800+ hours of kids’ shows.

The streaming service features educational shows, including “Gisele’s Big Backyard,” “Grammaropolis” and “ABC Monster” .

There are hundreds of kids’ music videos, including “Alex and the Kaleidoscope Band” and “Zinghoppers,” and a catalog of classic content, such as “Babar” and “Franklin and Friends.”

Our marketing mission is to generate awareness and consumer interest in the brands of Kartoon Studios via a 360-degree approach to reach audiences through all touchpoints.

Successful marketing campaigns for our brands have not only included traditional marketing tactics but now also include utilizing social media influencers (individuals with a strong, existing social media presence who drive awareness of our brands to their followers), strategic social media marketing, and cross-promotional consumer product campaigns.

We also deploy digital and print advertising to support the brands, as well as work with external media relations professionals to promote our efforts to both consumer and industry.

We consistently initiate strategic partnerships with brands that align and offer value to us.

Channel Frederator Network,

owned by Frederator, is the largest animation focused creator network on YouTube with over 2,500 channels.

Frederator also owns Frederator

Studios, focused on developing and producing shorts and series for and with partners.

Over the past 20 years, Frederator Studios has partnered

with Cartoon Network, Nickelodeon, Nick Jr., Netflix, Sony Pictures Animation and Amazon.

We also own the Canadian

company Ameba Inc.

(“Ameba”), which operates a premier subscription-based streaming service specializing in younger

children’s entertainment.

As a cornerstone of TOON Media Networks’ subscription offerings, Ameba delivers a vast library

of engaging and educational content, accessible across multiple platforms.

Ameba significantly enhances our digital footprint and

revenue streams.

It is being distributed in the United States on the Company’s wholly-owned subscription

and advertisement supported service, which includes video on demand and streaming linear channels.

The channels are

also offered on 3rd party platforms as free ad supported streaming TV (“FAST”) and subscription video

on demand (“SVOD”).

Distribution platforms include Comcast, Cox, DISH, Sling TV, Amazon Prime Video, Amazon Fire,

Roku, Apple TV, Apple iOS, Android TV, Android mobile, XBox, Pluto TV, Xumo, Tubi, YouTube, YouTube Kids and

KartoonChannel.com, as well as Samsung and LG smart TVs.

Ameba TV is available in the

and Canada and provides numerous hours of entertainment and educational programming for children.

Ameba TV is comprised of 14,000+

episodes and 2,800+ hours of kids’ shows.

The streaming service features educational shows, including “Sooty,” “Karl,”

“Dino the Dinosaur,” and “Alphabuddies” .

There are hundreds of kids’ music videos, including

“Wee Sing” and “Ukulele U,” and a catalog of classic content, such as “Babar”

and “Franklin and Friends.”

Our marketing mission is to

generate awareness and consumer interest in the brands of Kartoon Studios via a 360-degree approach to reach audiences through all touchpoints.

Successful marketing campaigns for our brands have not only included traditional marketing tactics but now also include utilizing social

media influencers (individuals with a strong, existing social media presence who drive awareness of our brands to their followers), strategic

social media marketing, and cross-promotional consumer product campaigns.

We also deploy digital and print advertising to support the

brands, as well as work with external media relations professionals to promote our efforts to both consumer and industry.

We consistently

initiate strategic partnerships with brands that align and offer value to us.

Our Kartoon Channel!

platform, which has potential reach into over 100 million U.S.

television households, nearly 100% of the U.S.

market penetration, provides additional reach to promote our content and consumer products.

We compete against other creators of children’s content including Disney, Nickelodeon, PBS Kids, and Sesame Street, as well as other small and large creators.

In the saturated children’s media space, we compete with these other creators for both content distribution across linear, VOD, and digital platforms, as well as retail shelf space for our licensed products.

To compete effectively, we are focused on our strategic positioning of “content with a purpose,” which we believe is a point of differentiation embraced by the industry, as well as parents and educators.

platform, being widely available

television households through Internet-based streaming services, provides additional reach to promote our content and consumer

We compete against other creators

of children’s content including Disney, Nickelodeon, Netflix, Hulu, PBS Kids, and Sesame Street, as well as other small and large

In the saturated children’s media space, we compete with these other creators for both content distribution across linear,

VOD, and digital platforms, as well as retail shelf space for our licensed products.

To compete effectively, we are focused on our strategic

positioning of “content with a purpose,” which we believe is a point of differentiation embraced by the industry, as well

as parents and educators.

Additionally, the Kartoon Channel!

enables us to increase the awareness of our brands through an owned platform.

enables us to increase the awareness of our brands through an owned

Customers and Licensees

As of December 31, 2023, we have partnered with over 40 consumer products licensees.

As of the same date, we licensed our content to over 60 broadcasters in more than 90 countries worldwide, as well as a number of VOD and online platforms that have a global reach.

This broad cross-section of customers includes companies such as Comcast, Netflix, Sony, YouTube, Mattel, Target, Penguin Publishing, Manhattan Toys, Roku, Apple TV, Amazon, Google, Bertelsmann Music Group, Discovery International, Hot Topic and others both domestically and internationally.

At December 31, 2023, we had four customers whose total revenue accounted for 74.4% of our total revenue.

In the year ended December

31, 2024, we have partnered with 39 consumer products licensees.

As of the same date, we licensed our content to over 60 broadcasters

in more than 90 countries worldwide, as well as a number of VOD and online platforms that have a global reach.

This broad cross-section

of customers includes companies such as Comcast, Netflix, Sony, YouTube, Mattel, Target, Penguin Publishing, Manhattan Toys, Roku, Apple

TV, Amazon, Google, Bertelsmann Music Group, Discovery International, Hot Topic and others both domestically and internationally.

In the year ended December 31,

2024, we had four customers whose total revenue accounted for 75.7% of our total revenue.

Government Regulation

The FCC requires broadcast networks to air a required number of hours of educational and informational content (E/I).

We are subject to online distribution regulations, namely the FTC’s Children’s Online Privacy Protection Act (COPPA) which regulates the collection of information of children younger than 13 years old.

We are currently subject to regulations applicable to businesses generally, including numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing, enforcement and advertising of credit accounts, and limitations on the maximum amount of finance charges that may be charged by a credit provider.

Although credit to some of our customers is provided by third parties without recourse to us based upon a customer’s failure to pay, any restrictive change in the regulation of credit, including the imposition of, or changes in, interest rate ceilings, could adversely affect the cost or availability of credit to our customers and, consequently, our results of operations or financial condition.

As an international production company, we are also subject to country-specific requirements such as federal and provincial content regulations and tax credit guidelines in Canada.

Licensed toy products are subject to regulation under the Consumer Product Safety Act and regulations issued thereunder.

These laws authorize the Consumer Product Safety Commission (the “CPSC”) to protect the public from products which present a substantial risk of injury.

The CPSC can require the manufacturer of defective products to repurchase or recall such products.

The CPSC may also impose fines or penalties on manufacturers or retailers.

The FCC requires broadcast

networks to air a required number of hours of educational and informational content (E/I).

We are subject to online distribution regulations,

namely the FTC’s Children’s Online Privacy Protection Act (COPPA) which regulates the collection of information of children

younger than 13 years old.

We are currently subject to

regulations applicable to businesses generally, including numerous federal and state laws that impose disclosure and other requirements

upon the origination, servicing, enforcement and advertising of credit accounts, and limitations on the maximum amount of finance charges

that may be charged by a credit provider.

Although credit to some of our customers is provided by third parties without recourse to us

based upon a customer’s failure to pay, any restrictive change in the regulation of credit, including the imposition of, or changes

in, interest rate ceilings, or imposition of tariffs could adversely affect the cost or availability of credit to our customers and, consequently,

our results of operations or financial condition.

As an international production company, we are also subject to country-specific requirements

such as federal and provincial content regulations and tax credit guidelines in Canada.

Licensed toy products are

subject to regulation under the Consumer Product Safety Act and regulations issued thereunder.

These laws authorize the Consumer Product

Safety Commission (the “CPSC”) to protect the public from products which present a substantial risk of injury.

require the manufacturer of defective products to repurchase or recall such products.

The CPSC may also impose fines or penalties on manufacturers

or retailers.

Similar laws exist in some states and other countries in which we plan to market our products.

Although we do not manufacture and may not directly distribute toy products, a recall of any of the products may adversely affect our business, financial condition, results of operations and prospects.

We also maintain websites which include our corporate website located at www.kartoonstudios.com and many brand websites.

These websites are subject to laws and regulations directly applicable to internet communications and commerce, which is a currently developing area of the law.

The United States has enacted internet laws related to children’s privacy, copyrights and taxation.

However, laws governing the internet remain largely unsettled.

The growth of the market for internet commerce may result in more stringent consumer protection laws, both in the United States and abroad, that place additional burdens on companies conducting business over the internet.

We cannot predict with certainty what impact such laws will have on our business in the future.

In order to comply with new or existing laws regulating internet commerce, we may need to modify the manner in which we conduct our website business, which may result in additional expense.

Because our products are manufactured by third parties and licensees, we are not significantly impacted by federal, state and local environmental laws and do not have significant costs associated with compliance with such laws and regulations.

Although we do not manufacture

and may not directly distribute toy products, a recall of any of the products may adversely affect our business, financial condition,

results of operations and prospects.

We also maintain websites

which include our corporate website located at www.kartoonstudios.com and many brand websites.

These websites are subject to laws

and regulations directly applicable to internet communications and commerce, which is a currently developing area of the law.

States has enacted internet laws related to children’s privacy, copyrights and taxation.

However, laws governing the internet remain

largely unsettled.

The growth of the market for internet commerce may result in more stringent consumer protection laws, both in the United

States and abroad, that place additional burdens on companies conducting business over the internet.

We cannot predict with certainty

what impact such laws will have on our business in the future.

In order to comply with new or existing laws regulating internet commerce,

we may need to modify the manner in which we conduct our website business, which may result in additional expense.

Because our products are manufactured

by third parties and licensees, we are not significantly impacted by federal, state and local environmental laws in connection with the

manufacture of our consumer products and do not have significant costs associated with compliance with such laws and regulations.

Intellectual Property

As of December 31, 2023, we own the following properties and related trademarks such as:

“Rainbow Rangers,” “ SpacePop, ” “ Secret Millionaires Club,”“Thomas Edison’s Secret Lab,” “ Baby Genius, ” “ Kid Genius, ” “ Wee Worship, ”

“ Kaflooey, ” “ Bravest Warriors,” “Bee & Puppycat” and “ Castlevania,” as well as several other names and trademarks on characters that had been developed for our content and brands.

Additionally, we have the United States trademark and various international trademarks applications pending for Kartoon Channel!, Kartoon Channel!

As of December 31, 2024, we

own the following properties and related trademarks:

“Rainbow Rangers,” “ SpacePop, ” “ Secret

Millionaires Club,”“Thomas Edison’s Secret Lab,” “ Baby Genius, ” “ Kid Genius, ”

“ Wee Worship, ” “ Kaflooey, ” “ Bravest Warriors,” “Bee & Puppycat”

and “ Castlevania,” as well as several other names and trademarks on characters that had been developed for our content

Additionally, we have the United States trademark and various international trademarks applications pending for Kartoon

Channel!, Kartoon Channel!

Pop Quiz, Little Genius and Little Genius Jukebox .

Through our controlling interest in Stan Lee Universe, we control the rights to the name, image, the likeness, the signature, and the consumer product licensing to the iconic Stan Lee.

As of December 31, 2023, we hold 22 registered trademarks in multiple classes in the United States associated with the Kartoon Studios brand.

We also have a number of registered and pending trademarks in Europe, Australia, China, Japan and Mexico and other countries in which our products are sold.

We also jointly hold 92 registered trademarks in multiple classes in multiple countries associated with our ownership interest in Stan Lee Universe, in addition to 6 pending trademarks.

As of December 31, 2023, we also hold rights in over 200 motion pictures, over 600 different shows across our partnerships with over 150 different licensors.

In addition, we hold 270 sound recordings and two literary work copyrights related to our video, music and written work products.

We have 50/50 ownership agreements with Martha Stewart and her related brand “ Martha & Friends ” and Gisele Bündchen’s and her related brand “ Gisele & the Green Team.

In addition to the wholly-owned or partially-owned properties listed above, we represent Llama Llama in the licensing and merchandising space.

Through our controlling interest

in Stan Lee Universe, we control the rights to the name, image, the likeness, the signature, and the consumer product licensing to the

iconic Stan Lee.

As of December 31, 2024, Kartoon

Studios, Inc.

directly holds 15 registered trademarks in the United States, 5 registered trademarks in the United Kingdom, 2 registered

trademarks in Australia, 1 registered trademark in New Zealand, and further related registrations in other jurisdictions throughout the

Our subsidiary, Mainframe Studios, Inc., holds 4 registered trademarks in the United States, 7 registered trademarks in Canada,

and 1 registered trademark in the United Kingdom.

Our subsidiary, Frederator Networks, Inc., holds 3 registered trademarks in the

United States, 1 pending registration in Canada, and 1 registration in Australia.

Our subsidiary, Stan Lee Universe LLC, holds 29

registered and 2 pending trademark registrations in the United States, 1 trademark registration in Canada, 3 trademark registrations in

the United Kingdom, and more than 50 related registrations throughout the world related to the Stan Lee name, image, and likeness.

As of December 31, 2024, we

also hold rights in over 150 motion pictures, over 525 different television shows across our partnerships with over 150 different licensors.

In addition, we hold 270 sound recordings and multiple literary work copyrights related to our video, music and written work products.

We have 50/50 ownership agreements

with Martha Stewart and her related brand “ Martha & Friends ” and Gisele Bündchen’s and her related brand

“ Gisele & the Green Team.

In addition to the wholly-owned

or partially-owned properties listed above, we represent Llama Llama in the licensing and merchandising space.

We protect our property rights

to our productions through available copyright and trademark laws and licensing and distribution arrangements with reputable companies

in specific territories and media for limited durations.

Despite these precautions, existing copyright and trademark laws afford only

limited, or no, practical protection in some jurisdictions.

It may be possible for unauthorized third parties to copy and distribute our

productions or portions of our productions.

In addition, although we own most of the music and intellectual property included in our products,

there are some titles which the music or other elements are in the public domain and for which it is difficult or even impossible to determine

whether anyone has obtained ownership or royalty rights.

It is an inherent risk in our industry that people may make such claims with

respect to any title already included in our products, whether or not such claims can be substantiated.

If litigation is necessary in

the future to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary

rights of others or to defend against claims of infringement or invalidity.

Any such litigation could result in substantial costs and

the resulting diversion of resources could have an adverse effect on our business, operating results or financial condition.

Environmental, Social and Governance Strategy

We are attempting to shape culture, social attitudes and societal outcomes with our animated content and consumer products that touch the lives of young people and their families.

We are attempting to shape

culture, social attitudes and societal outcomes with our animated content and consumer products that touch the lives of young people and

their families.

As a global content company that reaches millions of people, we aim to be a positive force in the world.

We are committed to advancing and strengthening our approach to environmental, social and governance (“ESG”) topics to help serve our partners, audiences, employees and stockholders — and to enhance our success as a business.

We are committed to responsible, ethical and inclusionary business practices as outlined below:

We are committed to advancing

and strengthening our approach to environmental, social and governance (“ESG”) topics to help serve our partners, audiences,

employees and stockholders — and to enhance our success as a business.

We are committed to responsible,

ethical and inclusionary business practices as outlined below:

Human Capital Management

As of December 31, 2023, we employed 242 full-time employees and 40 independent contractors.

We aim to build a culture that attracts and retains the best employees and a workplace where everyone feels welcome, safe and inspired.

Our human capital management strategy is intended to address the following areas:

As of December 31, 2024,

we employed 344 full-time employees and 68 independent contractors.

We aim to build a culture

that attracts and retains the best employees and a workplace where everyone feels welcome, safe and inspired.

Our human capital management

strategy is intended to address the following areas:

A Culture of Diversity, Equity and Inclusion

We seek to foster a culture of diversity, equity and inclusion through a range of partnerships, collaborations, programs and initiatives, some of which are described below.

We strive to be an inclusionary workplace because we believe that it strengthens our business.

• We maintain a Chief Diversity Officer who is responsible for helping us meet our hiring goals and reviewing the content we create.

• Our board of directors is diverse with representation from people of color and the LGBTQ community.

We seek to foster a culture

of diversity, equity and inclusion through a range of partnerships, collaborations, programs and initiatives, some of which are described

We strive to be an inclusionary

workplace because we believe that it strengthens our business.

· We maintain a Chief Diversity Officer who is responsible for helping us meet our

hiring goals and reviewing the content we create.

· Our board of directors and executive management team is diverse with representation

from people of color and the LGBTQ community.

Preventing Harassment and Discrimination

We have enacted policies addressing harassment, discrimination and other behaviors that could create a hostile workplace, some of which are described below.

We have enacted policies addressing

harassment, discrimination and other behaviors that could create a hostile workplace, some of which are described below.

· We make training on preventing sexual harassment, discrimination and retaliation available to our employees.

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Social Impact and Corporate Social Responsibility

We believe that the content we produce, primarily directed at young people and their families, both reflects and influences how our young viewers perceive and understand important issues.

We endeavor to earn our viewers’ trust through a variety of practices, and we are focused on using our platforms to create positive social impacts.

We believe that the content

we produce, primarily directed at young people and their families, both reflects and influences how our young viewers perceive and understand

important issues.

We endeavor to earn our viewers’ trust through a variety of practices, and we are focused on using our platforms

to create positive social impacts.

By way of just a few examples:

in our show Rainbow Rangers , a diverse cast of girls works to save animals and protect the environment, while demonstrating the power of teamwork;

in our Llama Llama series, we teach kindness and inclusion, and feature a differently abled character, which we have been told is appreciated by moms and kids who deal with physical challenges.

In the earliest days of the COVID-19 pandemic, we spread public service messages to keep our audiences safe and informed with animated shorts featuring the iconic voices from our series including Warren Buffett from The Secret Millionaires Club and Jennifer Garner, the voice of Mama Llama from the Llama Llama series.

Our mission statement says it all:

“Content with a Purpose.” Social justice, caring about the environment and modeling appropriate and inclusionary behavior for kids has been part of our company for many years and we are constantly seeking ways to improve on what we have already been doing.

Website Access to Our SEC Filings and Corporate Governance Documents

On the Investors page on our website www.kartoonstudios.com we post links to our filings with the SEC, our Corporate Code of Conduct and Whistleblower Policy, which applies to our Board of Directors, executives and all of our employees, our Company Bylaws, our Insider Trading Policy and the charters of the committees of our Board of Directors.

Our filings with the SEC are posted as soon as reasonably practical after they are electronically filed with, or furnished to, the SEC.

in our show Rainbow Rangers , a diverse cast of girls works to save animals and protect the environment, while demonstrating the

power of teamwork;

in our Llama Llama series, we teach kindness and inclusion, and feature a differently abled character, which

we have been told is appreciated by moms and kids who deal with physical challenges.

In the earliest days of the COVID-19 pandemic, we

spread public service messages to keep our audiences safe and informed with animated shorts featuring the iconic voices from our series

including Warren Buffett from The Secret Millionaires Club and Jennifer Garner, the voice of Mama Llama from the Llama Llama

Our mission statement says

“Content with a Purpose.” Social justice, caring about the environment and modeling appropriate and inclusionary behavior

for kids has been part of our company for many years and we are constantly seeking ways to improve on what we have already been doing.

Website Access to Our SEC Filings and Corporate

Governance Documents

On the Investors page on our

website www.kartoonstudios.com we post links to our filings with the SEC, our Corporate Code of Conduct and Whistleblower Policy,

which applies to our Board of Directors, executives and all of our employees, our Company Bylaws, our Insider Trading Policy and the charters

of the committees of our Board of Directors.

Our filings with the SEC are posted as soon as reasonably practical after they are electronically

filed with, or furnished to, the SEC.

You can also obtain copies of these documents by writing to us at:

Kartoon Studios, Inc., at 190 N.

Kartoon Studios, Inc., at 190

Canon Drive, 4 th Floor, Beverly Hills, California 90210, Attn:

Corporate Secretary or by using the “Contact” page of our website www.kartoonstudios.com/contact-us.

Corporate Secretary or by using the “Contact”

page of our website www.kartoonstudios.com/contact-us.

All of these documents and filings are available free of charge.

Generally, stockholders who have questions or concerns should contact our Investor Relations department at 212-564-4700.

The contents of our website are not incorporated in, or otherwise to be regarded as part of, this Annual Report on Form 10-K.

stockholders who have questions or concerns should contact our Investor Relations department at 212-564-4700.

The contents of our website

are not incorporated in, or otherwise to be regarded as part of, this Annual Report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business