Kartoon Studios Finalizes WOW! Acquisition Agreement

TL;DR

Kartoon Studios locked down the WOW! acquisition deal, big moves ahead.

AI Summary

On April 18, 2024, Kartoon Studios, Inc. entered into a material definitive agreement related to its previously announced acquisition of WOW! Unlimited Media Inc. The filing also includes financial statements and exhibits, and a Regulation FD disclosure. Kartoon Studios, Inc. was formerly known as Genius Brands International, Inc. and Pacific Entertainment Corp.

Why It Matters

This filing confirms the progression of Kartoon Studios' acquisition of WOW! Unlimited Media Inc., a significant strategic move that could reshape its market position and content offerings.

Risk Assessment

Risk Level: medium — Acquisition agreements carry inherent risks related to integration, financing, and regulatory approval, which could impact the deal's successful completion.

Key Players & Entities

• Kartoon Studios, Inc. (company) — Registrant
• WOW! Unlimited Media Inc. (company) — Acquisition Target
• Genius Brands International, Inc. (company) — Former Company Name
• Pacific Entertainment Corp (company) — Former Company Name
• April 18, 2024 (date) — Date of Report

FAQ

Key Financial Figures

• $0.001 — ich registered Common Stock, par value $0.001 per share TOON NYSE American LLC Indi
• $1.00 — eement. The offering price per Share is $1.00. The offering price is $0.99 per Pre-fu
• $0.99 — r Share is $1.00. The offering price is $0.99 per Pre-funded Warrant, which is equal
• $0.01 — al to the offering price per Share less $0.01. The Shares and Pre-funded Warrants ca
• $75,000 — s expenses in an aggregate amount up to $75,000. The Placement Agreement contains cust

Filing Documents

• toon-20240418.htm (8-K) — 40KB
• ex41formofpre-fundedwarrant.htm (EX-4.1) — 102KB
• ex-51opinionofflangaslaw.htm (EX-5.1) — 9KB
• ex-52opinionofreedsmithl.htm (EX-5.2) — 9KB
• ex101securitiespurchaseagr.htm (EX-10.1) — 219KB
• ex102placementagentagreeme.htm (EX-10.2) — 97KB
• ex-51opinionofflangaslaw001.jpg (GRAPHIC) — 233KB
• ex-51opinionofflangaslaw002.jpg (GRAPHIC) — 268KB
• ex-51opinionofflangaslaw003.jpg (GRAPHIC) — 78KB
• ex-52opinionofreedsmithl001.jpg (GRAPHIC) — 213KB
• ex-52opinionofreedsmithl002.jpg (GRAPHIC) — 257KB
• ex-52opinionofreedsmithl003.jpg (GRAPHIC) — 119KB
• 0001355848-24-000059.txt ( ) — 2307KB
• toon-20240418.xsd (EX-101.SCH) — 2KB
• toon-20240418_lab.xml (EX-101.LAB) — 21KB
• toon-20240418_pre.xml (EX-101.PRE) — 12KB
• toon-20240418_htm.xml (XML) — 3KB

01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On April 18, 2024, Kartoon Studios, Inc. (the "Company") entered into a securities purchase agreement (the "Purchase Agreement") pursuant to which the Company agreed to issue and sell directly to certain institutional investors up to 7,000,000 shares (the "Shares") of common stock, $0.001 par value per share (the "Common Stock"), and/or pre-funded Common Stock purchase warrants (the "Pre-funded Warrants") in up to four closings (the "Offering"). In the initial closing, the Company is offering 4,000,000 Shares and/or Pre-funded Warrants. In up to three additional closings, the Company will sell up to an additional 3,000,000 Shares and/or Pre-funded Warrants to such investors pursuant to the Purchase Agreement. The date of each of the additional closings will occur no later than one hundred eighty (180) days following the date of the Purchase Agreement, at such time that is mutually agreed up on by the Company and such investors, subject to certain conditions set forth in the Purchase Agreement. The offering price per Share is $1.00. The offering price is $0.99 per Pre-funded Warrant, which is equal to the offering price per Share less $0.01. The Shares and Pre-funded Warrants can only be purchased together in the Offering but will be issued separately and will be immediately separable upon issuance. The holders of the Pre-funded Warrants will not have the right to exercise any portion of its Pre-funded Warrants if the holder, together with its affiliates and certain related parties, would beneficially own in excess of 4.99% (or, at the election of the purchaser, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. Each Pre-funded Warrant will have an exercise price of $0.01 per share. Each Pre-funded Warrant will be exercisable upon issuance and will expire when exercised in full. The Purchase Agreement contains customary representations, warranties and ag

01 REGULATION FD DISCLOSURE

ITEM 7.01 REGULATION FD DISCLOSURE On April 18, 2024, the Company issued a press release announcing the Offering. A copy of the press release is attached as Exhibit 99.1 and is incorporated by reference herein. The information contained in this Item 7.01 including Exhibit 99.1 hereto, is furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended, or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company's filings under the Securities Act of 1933, as amended, or the Exchange Act.

01. FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits Exhibit No. Description 4.1 Form of Pre-Funded Warrant 5.1 Opinion of Flangas Law Group 5.2 Opinion of Reed Smith LLP 10.1 Kartoon Studios - Securities Purchase Agreement, dated April 18, 2024, by and between Kartoon Studios, Inc. and each purchaser identified therein 10.2 Placement Agent Agreement, dated as of April 18, 2024, by and between Kartoon Studios, Inc. and EF Hutton LLC 99.1 Press Release of Kartoon Studios, Inc., dated April 18, 2024 104.0 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL 3

Forward Looking Statements

Forward Looking Statements This Current Report on Form 8-K contains certain statements which constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation, our ability to generate revenue or achieve profitability; our ability to obtain additional financing on acceptable terms, if at all; the potential issuance of a significant number of shares, which will dilute our equity holders; fluctuations in the results of our operations from period to period; general economic and financial conditions; our ability to anticipate changes in popular culture, media and movies, fashion and technology; competitive pressure from other distributors of content and within the retail market; our reliance on and relationships with third-party production and animation studios; our ability to market and advertise our products; our reliance on third-parties to promote our products; our ability to keep pace with technological advances; our ability to protect our intellectual property and those other risk factors set forth in the "Risk Factors" section of the Company's most recent Annual Report on Form 10-K and in the Company's subsequent filings with the Securities and Exchange Commission. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. KARTOON STUDIOS, INC. Date: April 19, 2024 By: /s/ Andy Heyward Name: Andy Heyward Title: Chief Executive Officer 5

View Full Filing

View this 8-K filing on SEC EDGAR