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.

Kartoon Studios has secured aggregate settlement payments of $28.475M from five defendants in the Augenbaum v. Anson Investments Master Fund LP et al. litigation. The agreements, reached between June 2 and June 5, 2026, are subject to fees and expenses of plaintiff's counsel, as well as mutual releases. The court has approved three of the five settlement agreements, while the remaining two are pending approval.

The litigation is pending in the United States District Court for the Southern District of New York under Case No. 1:22-CV-00249-AS. The settlements provide Kartoon Studios with significant financial relief and mark a step toward resolving the legal dispute.

Settlement Details

The following table outlines the status of the settlement agreements:

The aggregate payment of $28.475M will be received after deducting plaintiff's counsel fees and expenses. The terms and conditions of the settlements include mutual releases between the parties involved.