What changed in this filing

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Item 1. Business

2026-03-31 compared with 2025-03-31 · 386 added, 351 removed, 92 unchanged (89% of the section changed)

Kartoon Studios, Inc.

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 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!

Genius Brands International, Inc.) (the “Company,” “Kartoon Studios,” “we,” “us” or “our”)

is a global content and brand management company focused on the creation, production, licensing, and distribution of multimedia animated

content for children.

Led by experienced industry personnel, the Company’s core business includes original intellectual property

(“IP”) development, third-party IP production services, media agency, and content monetization through licensing and owned

distribution platforms.

Kartoon Studios’ owned

and produced titles 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’s

library also includes titles such as Baby Genius , Thomas Edison’s Secret Lab , Warren Buffett’s Secret Millionaires

Club , Team Zenko Go!

, Reboot , Bee & PuppyCat:

Lazy in Space , and Castlevania .

The Company maintains

a strategy of leveraging owned IP and third-party relationships to expand distribution and consumer product licensing.

Kartoon Studios also owns

Wow Unlimited Media Inc.

(“Wow”), through which the Company operates Mainframe Studios - one of the largest animation

production studios globally.

Mainframe Studios is a producer-for-hire for several major streaming platforms and IP holders.

To date, Mainframe

has produced over 1,200 television episodes, 70 movies, and 3 feature films, including titles such as Barbie Dreamhouse Adventures ,

Above & Beyond , Cocomelon , SuperKitties , It’s Andrew!, and Unicorn Academy , in

partnership with leading global media companies.

In addition, Wow owns Frederator Networks Inc.

(“Frederator”).

operates a leading animation-focused creator network, Channel Frederator Network, on YouTube encompassing over 2,500 channels.

Studios has developed and produced original programming in partnership with Cartoon Network, Nickelodeon, Nick Jr., Netflix, Sony Pictures

Animation, and Amazon.

The Company distributes its

content across streaming platforms, linear television, and its ad-supported and subscription-based video-on-demand (“VOD”)

services and apps, including Kartoon Channel!

and Ameba TV .

Distribution partners include YouTube, YouTube Kids, Amazon

Prime Video, Amazon Fire, Roku, Apple TV, iOS, Android TV, Android mobile, Pluto TV, Xumo, Tubi, Samsung TV Plus, Google TV, Cox, DISH,

Sling TV, KartoonChannel.com, and smart TVs from Samsung and LG.

The Company also licenses content to third-party networks and streaming

services globally, including Netflix, Paramount+, HBO Max, and Nickelodeon.

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

Beacon Media Group, LLC and The Beacon Communications Group, Ltd.

(collectively, “Beacon”), a specialized media and marketing

agency focused on children’s and family audiences.

Beacon represents over 20 established and emerging brands across the toy, consumer

products, and family entertainment sectors, including Bandai Namco, Moose Toys, Bazooka Brands, Goliath Games, Playmates Toys, and Cepia

The agency has developed a strong reputation within the toy industry, supported by long-standing client relationships, deep category

expertise, and a consistent track record of campaign execution.

We believe that Beacon’s positioning within a niche, relationship-driven

market provides barriers to entry and supports durable demand for its services.

The Company owns Ameba Inc.

which operates Ameba TV, a subscription streaming service with a focus on educational and entertainment content for younger children.

As a cornerstone of the Company’s 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 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

Through its investment in

Germany-based Your Family Entertainment AG (“YFE”), a publicly listed company on the Frankfurt Stock Exchange (RTV:

the Company holds a strategic interest in one of Europe’s leading independent children’s content providers, with a catalog

of approximately 150 titles and 3,500 half-hour episodes.

The Company holds a controlling

interest in Stan Lee Universe, LLC (“SLU”), which owns the IP rights to Stan Lee’s name, likeness, signature, and associated

Our main sources of revenue

are derived from animation production services provided to third parties, the sale of licenses for the distribution of films and television

programs, advertising revenues, and merchandising and licensing sales.

Production Services

Our production services business

is centered on delivering original and third-party commissioned animated content with a focus on production efficiency and scalability.

Mainframe Studios, our primary production entity, is undertaking operational enhancements through the adoption of flexible production

workflows, strategic outsourcing, and the integration of new technologies.

These initiatives aim to optimize cost structures and streamline

the production pipeline.

To date, Mainframe has produced over 1,200 television episodes, 70 movies, and three feature films, including

titles such as Barbie Dreamhouse Adventures , Octonauts:

Above & Beyond, Cocomelon, SuperKitties , and Unicorn Academy ,

in partnership with leading global media companies.

During 2025, we entered into

active development and production on Hundred Acre Wood’s Winnie and Friends, an animated franchise series inspired by Winnie-the-Pooh

Structured as a serialized short-form series, the production is engineered for broad multi-platform distribution across

AVOD, FAST, SVOD, in-store, and international platforms.

Developed as a cornerstone franchise for Kartoon Studios, the series features

an original yarn-based animation style combining digital tools with handcrafted textures to create a warm, storybook aesthetic enhanced

by music and dance.

The franchise includes a multi-phase rollout, consisting of major holiday specials, including Christmas, Halloween,

Thanksgiving, and Easter, and is supported by an integrated global consumer products program spanning toys, apparel, home goods, publishing,

collectibles, and retail partnerships.

The series is scheduled to premiere in Fall 2026, with a Christmas holiday special debuting in

During 2025, we also produced

numerous owned IP and for-hire projects including:

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

Mainframe Studios produces

this content on a service basis for Sony TV Kids.

Through 2025, the final 6 episodes of SuperKitties Season 2 were delivered and

27 x 11-minute episodes of SuperKitties Season 3 were delivered with the remaining 23 x 11-minute episodes expected to be delivered

by the third quarter of 2026.

In addition, 10 supplementary animated shorts of 2 minutes were also delivered in 2025.

The series was greenlit

for a fourth season in March 2025, and Mainframe Studios started production on this fourth season in the third quarter of 2025, with delivery

of content expected to commence in the second quarter of 2026.

This fourth season will include 3 x 60-minute specials, 20 x 11-minute

episodes and 6 x 2 minute shorts.

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.

2D Preschool series for PBS Kids, which first aired in February 2026, began full production in 2024.

Phoebe & Jay follows the

adventures of 6-year-old twins Phoebe and Jay Yarber, who live with their family in the fantastical Tobsy Towers.

The series is designed

to support early literacy skills for preschoolers by showcasing the various kinds of texts they see in their everyday lives, helping them

understand, navigate, and participate in the world around them.

This series has an overall order of 80 x 11-minute episodes, with deliveries

ongoing with completion expected by the third quarter of 2026.

This series also includes 20 interstitials and 5 web games.

It’s Andrew!:

This vibrant, funny, and heart-filled preschool animated series bursting with creativity and imagination is following the adventures of

a young rhino living as a very big unicorn in the whimsical town of Hornsby Downs.

In 2024, Mainframe Studios began co-production of the

series, working alongside Pirate Size Productions and Infinite Studios.

The series consists of 40 x 7 minutes episodes, and is targeted

at preschool audiences, blending visually imaginative storytelling with themes of individuality and self-acceptance.

The production was

commissioned by the Australian Broadcasting Corporation, CBC (Canada), and Société Radio-Canada (Canada), with Kartoon Studios

retaining international distribution, licensing, and merchandising rights.

The series premiered in December 2025 on CBC Kids, Radio-Canada,

CBC Gem, and ICI TOU.TV in Canada, and is expected to premiere on ABC Kids and ABC iview in Australia in 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:

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.

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.

Unicorn Academy is set on

Unicorn Island, a fictional environment where students attend a boarding school to train as protectors of a magical realm.

The narrative

follows a core teen protagonist and her peers as they form bonds with unicorns, develop magical capabilities, and confront threats to

the island’s stability.

The series is designed and marketed primarily for the children’s and pre-teen audience, generally

aligning with the ages 7–12 demographic.

It features age-appropriate storytelling, adventure-driven narratives, and positive social-emotional

Mainframe Studios started production on these 16 x 22-minute episodes in 2024 with deliveries ongoing and final delivery due

the first quarter of 2026.

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.

A source of our revenue is

our licensing and merchandising activities from our underlying IP 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,

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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 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.

Current strategic priorities center on commercializing the Stan Lee IP portfolio and launching the Hundred Acre Wood:

Friends property, with emphasis on digital and physical consumer products as well as location-based fan experiences.

Content Distribution

Today’s global content

marketplace has evolved such that ubiquity is essential to success.

Kids now expect to watch what they want, when they want, wherever

As a result, content creators must deliver access across multiple distribution touchpoints.

Our strategy spans both traditional

linear broadcast in key international territories and a broad range of digital platforms.

We actively pursue placement of our content

and branded channels with leading distribution partners and maintain hands-on management of our digital presence.

This includes partners

and platforms such as Netflix, Apple TV, Roku, Samsung TV Plus, Amazon Fire TV, Amazon Prime Video, YouTube, Cox, DISH, Sling, Xumo, iOS,

Android/Google Play, LG and Samsung smart TVs, Tubi, and Pluto TV.

Our content distribution strategy is focused on scaling audience reach

and monetization across our proprietary networks, including Kartoon Channel!, Kartoon Channel!

Worldwide, Channel Frederator Network and

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, YouTube, YouTube Kids, and Samsung

and LG smart TVs.

The Kartoon Channel!

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

households through Internet-based streaming services.

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 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.

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.

has achieved significant domestic penetration, being widely available

television households through Internet-based streaming services.

Kartoon Channel!

delivers numerous episodes of carefully

curated family-friendly content featuring animated classics for little kids, including The Ghostly Adventures of Pac-Man, 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

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.

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!

We expanded the distribution footprint of Kartoon Channel!

by rolling out Kartoon Channel!

Worldwide in 2023.

Kartoon Channel!

Worldwide has a distribution footprint of over 61 territories across Europe, the Middle East, Africa, and Asia.

Kartoon Channel!

Worlwide is on Pay TV, Branded block, and FAST services.

The channel includes original Kartoon Channel!

programming, as well

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

Channel Frederator Network

as animated content from YFE’s animation catalogue, and other content acquisitions.

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

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.

the Canadian company Ameba Inc., which operates Ameba TV , 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,”

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

engaging and educational content, accessible across multiple platforms.

Ameba TV is comprised of 14,000+ episodes and 2,800+ hours

of kids’ shows.

The streaming service features educational shows, including Alphablocks , Numberblocks , 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.”

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.

Ameba TV significantly enhances our digital

footprint and revenue streams and is available in the U.S.

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.

platforms include Amazon Prime Video, Amazon Fire, Roku, Apple TV, Apple iOS, Android TV, Android mobile, XBox, as well as Samsung and LG

Media and Advisory Services

Beacon’s media advisory

and advertising operations are structured to generate recurring and diversified revenue through a combination of retainer-based engagements

and commission-driven media planning and buying.

This blended revenue model affords client flexibility and supports margin optimization

through efficient resource utilization.

Beacon has continued to invest in higher-value service offerings, including influencer-driven

marketing programs, data-informed media planning, and customized campaign development.

These capabilities have increased the scope and

duration of client engagements and strengthened customer retention.

Beacon provides services to a range of clients in the toy, gaming,

and consumer products industries including Moose Toys, Goliath Games, Bandai Namco, Just Play, and Bazooka Candy Brands, and more.

also plans and purchases advertising across a broad mix of digital and connected television platforms, including YouTube, Paramount, Disney+,

Hulu, Roku, Tubi, Amazon, Blockboard, Future Today, Kidoodle, Precisify, Facebook, and TikTok.

As our services scale, we expect to benefit

from operating leverage, as incremental revenue can be generated with comparatively limited increases in fixed costs.

Our marketing mission is to

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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.

The industry in which we operate

is highly competitive.

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 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

We also compete with other media and entertainment companies, independent production companies and VOD services for creative

and performing talent, story properties, show concepts, scripted and other programming and advertiser support.

Many of our competitors enjoy

competitive advantages such as greater brand recognition, legacy operating histories and larger marketing and content budgets, as well

as greater financial, technical, marketing, distribution, human and other resources.

To compete effectively, we are focused on our strategic

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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.

31, 2025, we partnered with 35 consumer products licensees.

During the same period, we licensed our content to over 60 broadcasters in

more than 150 countries worldwide, as well as a number of VOD and online platforms that have a global reach.

This broad cross-section

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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.

During the years ended December 31,

2025 and 2024, we had four customers who accounted for 81.9% and 75.7% of our total revenue.

respectively.

The loss of any such customer

could have a material negative impact on our financial condition and operating results.

Government Regulation

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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.

namely the Federal Trade Commission’s (the “FTC”) Children’s Online Privacy Protection Act (“COPPA”),

which regulates the collection of information from children younger than 13 years old.

The FTC has sought to expand its authority in this

area through various rulemakings related to general privacy, targeted advertising and children’s privacy.

There has been an increased

focus on children’s privacy at both the state and federal levels within the United States, as well as internationally.

Consumer Products Safety

Licensed toy products are

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results of operations and prospects.

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.

Other Regulatory Considerations

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.

We also maintain websites

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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.

States has enacted internet laws related to information and network security, children’s privacy, governmental access to data, copyrights

and taxation, among other things.

Many of these laws and regulations are still evolving and could be interpreted, updated, or new laws

passed in ways that could harm our business.

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.

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.

Intellectual Property

We derive substantial value

from the development, acquisition, exploitation, and protection of intellectual property.

We own, directly and through our subsidiaries,

and license from third parties, a portfolio of copyrights, trademarks, service marks, trade names, and other proprietary rights used in

connection with our content, distribution platforms, and consumer products.

Owned and Controlled

As of December 31, 2025, 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 .

owned and controlled properties and related trademarks, including Rainbow Rangers , SpacePop , Secret Millionaires Club ,

Thomas Edison's Secret Lab, Baby Genius, Kid Genius, Wee Worship, KC!

Pop Quiz, KC Play Mix:

Surviving Roblox, Kidaverse:

Roblox Rumble,

Shaq's Garage, Bravest Warriors, Bee and PuppyCat, Castlevania, Stan Lee's Mighty 7, and Hundred Acre Wood’s:

Friends , together with various additional character, brand, and program names and marks developed in connection with our content and

We also hold trademark registrations and pending trademark applications in the United States and certain foreign jurisdictions

for a number of our brands, including Kartoon Channel!, the name and signature of Stan Lee, and the titles of several of our owned

animated series.

The foregoing is not intended to be an exhaustive list of our intellectual property assets.

Stan Lee Rights

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.

in Stan Lee Universe LLC, we control certain rights associated with Stan Lee, including all rights in the name, image, likeness, signature,

and unique personal characteristics of the late comic book icon.

Additionally, we control social media accounts pertaining to Stan Lee,

the websites and certain related domains, the YouTube channels Stan Lee Presents and The Real Stan Lee, various word marks

in the name Stan Lee and design marks in Stan Lee's stylized signature, and the consumer product licensing to the iconic Stan Lee.

Trademark Portfolio

As of December 31, 2025, 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.

directly held 15 registered trademarks in the United States, 5 in the United Kingdom, 2 in Australia, and 1 in New Zealand,

as well as registrations in additional jurisdictions.

Mainframe Studios, Inc.

held 4 registered trademarks in the United States, 7 in

Canada, and 1 in the United Kingdom.

Frederator Networks, Inc.

held 3 registered trademarks in the United States, 1 pending registration

in Canada, and 1 registration in Australia.

Stan Lee Universe LLC held 29 registered and 2 pending trademark registrations in the United

States, 1 registration in Canada, 3 registrations in the United Kingdom, and more than 50 related registrations in other jurisdictions,

each relating to the Stan Lee name, image, and likeness.

Content Library

and Other Rights

As of December 31, 2025, 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.

held distribution rights to more than 225 motion pictures and more than 750 television series licensed from more than 175 content partners.

These rights support the programming of Ameba and Kartoon Channel!, our owned and operated streaming platforms, as well as a portfolio

of branded channels distributed across multiple third-party platforms in AVOD, SVOD, and FAST formats.

We also held 270 sound recordings

and multiple literary work copyrights related to our video, music, and written work products.

Jointly Owned

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.

in place with Martha Stewart and her related brand Martha & Friends and Gisele Bündchen and her related brand Gisele

& the Green Team.

Protection and

We protect our intellectual

property rights through a combination of copyright and trademark law and contractual protections embedded in our licensing, distribution,

and commercial arrangements, including provisions that limit grants of rights to specific territories, media, and terms.

We also actively

monitor online platforms and vendors for unauthorized use of our content and brands, and in certain cases we deploy third-party scanning

and takedown services as conditions warrant.

We have taken enforcement action in the past, including with respect to the Stan Lee brand,

and we will not hesitate to do so in the future.

While the scope and enforceability of intellectual property protections vary by jurisdiction,

we believe our approach to monitoring and enforcement positions us to respond effectively to infringement wherever it occurs.

to time, we may nonetheless be subject to claims challenging the scope or validity of our rights, and any such proceedings could result

in costs or diversion of management attention that could adversely affect our business, results of operations, or financial condition.

Environmental, Social and Governance Strategy

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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:

and strengthening our approach to environmental, social and governance topics to help serve our partners, audiences, employees and stockholders,

and to enhance our success as a business.

Human Capital Management

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we employed 294 full-time employees and 40 independent contractors.

The decrease in headcount relative to the prior year was primarily

due to leveraging third-party partnerships to support certain active projects and to decrease our overhead costs.

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

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

· We expect employees to report any violations of Company policies, including sexual harassment, they witness.

Among other ways, employees can report incidents of harassment using our anonymous complaint and reporting hotline.

In furtherance of this goal,

we have enacted policies addressing harassment, discrimination and other behaviors that could create a hostile workplace.

We make training

on preventing sexual harassment, discrimination and retaliation available to our employees.

Additionally, we expect employees to report

any violations of Company policies, including sexual harassment, they witness.

To encourage our employees to report their concerns without

fear of retaliation, employees are able to report incidents of harassment using our anonymous complaint and reporting hotline.

Social Impact and Corporate Social Responsibility

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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

By way of just a couple of

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

the power of teamwork;

and 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.

To further evidence our Corporate

Social Responsibility initiatives, we support educational programming through our creative and production involvement in the PBS preschool

animated series Phoebe & Jay .

The series features fraternal twins intentionally designed to reflect underrepresented minority

communities, reinforcing our commitment to diversity and inclusive representation in children’s media.

Built around a foundational

literacy curriculum, the program promotes early literacy and functional reading skills by encouraging young viewers to engage with everyday

texts, problem-solving, and life skills, contributing to positive early childhood learning and development outcomes.

a preschool animated series, was designed to promote positive social and emotional learning for young audiences, including themes of self-acceptance,

empathy, and resilience.

Through the main character’s experiences, the series encourages children to embrace individuality and develop

confidence in their unique abilities.

Our mission statement says

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

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

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.

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

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.

Smaller Reporting Company

We are a “smaller reporting

company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

As a result, we may take

advantage of certain reduced disclosure obligations available to smaller reporting companies, including the exemption from compliance

with the auditor attestation requirements pursuant to the Sarbanes-Oxley Act of 2022, reduced disclosure about our executive compensation

arrangements and the requirements to provide only two years of audited financial statements in our annual reports and registration statements.

We will continue to be a “smaller reporting company” as long as (1) we have a public float (i.e., the market value of our

American Depositary Shares held by non-affiliates) less than $250 million calculated as of the last business day of our most recently

completed second fiscal quarter, or (2) our annual revenues are less than $100 million for our previous fiscal year and we have either

no public float or a public float of less than $700 million as of the end of that fiscal year’s second fiscal quarter.

disclosures in our SEC filings due to our status as a “smaller reporting company” may make it harder for investors to analyze

our results of operations and financial prospects.

What changed 10-K

Item 1. Business