Kartoon Studios swaps $1,799,162.60 debt for shares

Kartoon Studios, Inc. entered into an Agreement with Continuation Capital, Inc. to satisfy obligations totaling $1,799,162.60 by issuing up to 3,148,535 shares of common stock.

Accepted by SEC EDGAR 09/05/2025 - 05:25 PM EDT Learn about SEC filing dates

Rhea-AI Filing Summary

Kartoon Studios, Inc. entered into an Agreement with Continuation Capital, Inc. to satisfy obligations totaling $1,799,162.60 by issuing up to 3,148,535 shares of common stock. A Florida Circuit Court approved the Agreement on August 28, 2025, and NYSE American approved the share issuance on September 2, 2025.

The shares will be issued as an unregistered equity issuance at a rate of 1.75 shares per dollar of obligations under an exemption from registration provided by Section 3(a)(10) of the Securities Act of 1933. This converts liabilities owed to CCI into equity rather than cash payments.

Insights

Equity & Capital Structure Analyst

Kartoon converts about $1.8M of obligations into new shares, trading debt for equity.

Kartoon Studios agreed with Continuation Capital, Inc. to pay obligations of $1,799,162.60 by issuing up to 3,148,535 common shares. This effectively settles what appears as debt or similar obligations using stock instead of cash, changing the mix of liabilities and equity.

The issuance price is set indirectly at 1.75 shares per dollar of obligations, so the number of shares depends on the exact amount applied. Court approval on August 28, 2025 and NYSE American approval on September 2, 2025 were required before it became binding.

The transaction is structured as an unregistered sale relying on the Section 3(a)(10) exemption, meaning the shares will not be registered under the Securities Act in connection with this settlement. The practical impact for investors will depend on how many shares are ultimately issued and CCI’s future trading decisions.

8-K Event Classification

3 items: 1.01, 3.02, 9.01

3 items

Item 1.01 Entry into a Material Definitive Agreement Business

The company signed a significant contract such as a merger agreement, credit facility, or major partnership.

Item 3.02 Unregistered Sales of Equity Securities Securities

The company sold equity securities in a private placement or other unregistered transaction.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, or exhibit attachments filed with this report.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What agreement did Kartoon Studios (TOON) enter into with Continuation Capital?

Kartoon Studios entered an Agreement with Continuation Capital, Inc. to satisfy certain company obligations by issuing common stock instead of paying cash. The arrangement converts these obligations into equity, subject to specified approval conditions and a fixed share-per-dollar exchange rate.

How much debt is Kartoon Studios (TOON) settling and how many shares may be issued?

Kartoon Studios is settling obligations totaling $1,799,162.60 by issuing up to 3,148,535 shares of common stock to Continuation Capital. The exact number of shares corresponds to a fixed rate of 1.75 shares for each dollar of obligations covered by the Agreement.

What is the share issuance rate under Kartoon Studios’ Agreement with CCI?

The Agreement sets a rate of 1.75 shares of Kartoon Studios common stock for each dollar of obligations owed to Continuation Capital. This formula determines how many shares will be issued to cover the $1,799,162.60 aggregate obligations included in the settlement arrangement.

When did the Kartoon Studios (TOON) settlement Agreement become binding?

A Florida Circuit Court approved the Agreement on August 28, 2025, and it became binding on September 2, 2025, when NYSE American approved the issuance of the settlement shares. Both approvals were required before the equity-for-obligations structure could take effect.

Is Kartoon Studios registering the settlement shares under the Securities Act?

The settlement shares will be issued as unregistered securities under an exemption from registration provided by Section 3(a)(10) of the Securities Act of 1933. This allows Kartoon Studios to issue the stock to Continuation Capital without filing a separate registration statement for this transaction.

Which SEC item covers Kartoon Studios’ unregistered equity issuance to Continuation Capital?

The unregistered issuance of shares to satisfy obligations is disclosed under Item 3.02, Unregistered Sales of Equity Securities. Details of the Agreement itself, including the aggregate obligations and structure, are incorporated by reference from Item 1.01 relating to material definitive agreements.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 2, 2025

KARTOON STUDIOS, INC.

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction
of incorporation or organization) 001-37950 (Commission File Number) 20-4118216 (I.R.S. Employer Identification No.)

190 N. Canon Drive, 4th Fl., Beverly Hills, CA 90210

(Address of principal executive offices) (Zip Code)

(310) 273-4222

Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	TOON	NYSE American LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry into a Material Definitive Agreement.

Kartoon Studios, Inc. (the “Company”) entered into an Agreement (the “Agreement”) with Continuation Capital, Inc. ("CCI") to pay obligations in the aggregate amount of $1,799,162.60 by issuing up to 3,148,535 million shares of its common stock to CCI (the “Shares”). On August 28, 2025, the Circuit Court of the Twelfth Judicial Circuit in and for Sarasota County, Florida entered an order approving the Agreement. The Agreement became binding upon the parties on September 2, 2025, when the NYSE American approved the issuance of the Shares.

The foregoing description of the Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein in its entirety by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 above of this Current Report on Form 8-K is incorporated by reference in this Item 3.02. The Shares will be issued at a rate of 1.75 shares per dollar of the Company’s obligations, pursuant to an exemption from the registration requirements under Section 3(a)(10) of the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

*10.1		The Agreement and Stipulation, dated as of August 27, 2025
104		Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document)

* Exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted exhibit and schedule to the SEC upon request.

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: September 5, 2025	By:	/s/ Andy Heyward
	Name:	Andy Heyward
	Title:	Chief Executive Officer

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