Kartoon Studios announced that its Board of Directors has unanimously adopted a limited duration stockholder rights plan and declared a dividend distribution of one right for each outstanding share of common stock. The record date for this dividend distribution is July 13, 2026. The Rights Plan has not been adopted in response to any specific takeover bid or other proposal to acquire control of Kartoon Studios.

Additional information regarding the Rights Plan will be contained in a Form 8-K to be filed by Kartoon Studios with the U.S. Securities and Exchange Commission (SEC). The filing will be available on the SEC’s website, and copies will be accessible at no charge in the Investor Relations section of Kartoon Studios’ corporate website.

Key Details of the Rights Plan

About Kartoon Studios

Kartoon Studios is a global leader in children’s and family entertainment, delivering premium content and high-value animated intellectual property to millions of viewers worldwide. The company’s portfolio features globally recognized brands, as well as holding a controlling interest in Stan Lee Universe, and operates Mainframe Studios, one of North America’s largest animation producers, with more than 22,000 minutes of award-winning programming delivered.

Through its Toon Media Networks division including Kartoon Channel!, Ameba, Kartoon Channel Worldwide and Frederator, Kartoon Studios reaches audiences across linear television, AVOD, SVOD, FAST channels, and top streaming platforms. Kartoon Channel! is consistently rated as the #1 kids’ streaming app on the Apple App Store. With a global distribution footprint in over 60 territories, and a robust content pipeline, Kartoon Studios is being positioned for sustained growth and long-term shareholder value.

Kartoon Studios will receive aggregate settlement payments of approximately $78.5 million before plaintiff's counsel fees and expenses, following the entry of all settlement agreements by the U.S. District Court for the Southern District of New York. The ruling in the Augenbaum v. Anson Investments Master Fund LP et al. case (Case No. 1:22-CV-00249-AS) marks a significant financial milestone, strengthening the company's balance sheet and providing capital to execute its intellectual property-driven growth strategy without external financing or dilution.

Settlement Details

The action was brought under Section 16(b) of the Securities Exchange Act, known as the "short-swing profit" recovery statute, to recover profits from certain transactions in the company's securities. With the court's latest ruling, all settlement agreements reached to date with settling defendants have been entered. The action remains ongoing against the two remaining defendants who have not settled.

Key Terms

Strategic Deployment

Kartoon Studios intends to deploy the enhanced financial resources to accelerate the development, commercialization, and monetization of its owned intellectual property portfolio. The company plans to expand distribution platforms, including Kartoon Channel! and Ameba, and pursue strategic growth opportunities across content production, licensing, and consumer products. Andy Heyward, Chairman and CEO of Kartoon Studios, stated that the non-dilutive recoveries return substantial value directly to the company and its shareholders, enabling the acceleration of flagship franchises like Hundred Acre Wood and the Stan Lee Universe.