Kartoon Studios (NYSE: TOON) settles debt with 2,553,047 new shares

Rhea-AI Filing Summary

Kartoon Studios, Inc. entered a material definitive agreement with Continuation Capital, Inc. to settle outstanding obligations using stock instead of cash. The company agreed to issue 2,553,047 common shares to CCI in exchange for settling certain past due debts totaling $1,143,884 plus an additional $315,000.

A Florida state court approved the agreement on April 13, 2026, and it became binding on April 20, 2026 after NYSE American approved the share issuance. The unregistered shares will be issued at 1.75 shares per dollar of the company’s obligation under a Section 3(a)(10) Securities Act exemption.

Insights

Capital structure analyst

Kartoon Studios converts over $1.45M of obligations into equity through a court-approved share issuance.

Kartoon Studios, Inc. is using stock to settle certain past due obligations and accounts payable. The agreement with Continuation Capital, Inc. covers Subject Debts of $1,143,884 plus an Additional Settlement Amount of $315,000, paid via 2,553,047 new common shares.

The deal was approved by a Florida Circuit Court on April 13, 2026 and became binding once NYSE American cleared the issuance on April 20, 2026. The shares are issued at 1.75 shares per dollar of obligations under a Section 3(a)(10) exemption, which indicates court-supervised creditor protection and avoids a registered offering.

This transaction reduces specific liabilities but increases the equity base. The net effect on existing holders depends on the company’s total shares outstanding and overall leverage, which are not detailed in this excerpt.

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, and exhibit attachments filed with this report.

Key Figures

Shares issued for settlement: 2,553,047 shares Subject Debts amount: $1,143,884 Additional Settlement Amount: $315,000 +3 more

6 metrics

Shares issued for settlement 2,553,047 shares Common stock issued to Continuation Capital, Inc.

Subject Debts amount $1,143,884 Past due obligations and accounts payable settled

Additional Settlement Amount $315,000 Additional obligations included in the Agreement

Share issuance rate 1.75 shares per dollar Conversion rate of obligations into common stock

Court approval date April 13, 2026 Florida Circuit Court order approving Agreement

Binding date April 20, 2026 Date NYSE American approved share issuance

Key Terms

Material Definitive Agreement, Subject Debts, Unregistered Sales of Equity Securities, Section 3(a)(10) of the Securities Act, +1 more

5 terms

Material Definitive Agreement regulatory

"Item 1.01. Entry into a Material Definitive Agreement."

A material definitive agreement is a legally binding contract that creates major, long‑term obligations or rights for a company, such as loans, asset sales, mergers, or supplier deals. Think of it like a mortgage or lease for a business: it can change future cash flow, risk and control, so investors watch these agreements closely because they can materially affect a company’s value, financial health and stock price.

Subject Debts financial

"in exchange for the settlement of certain past due obligations and accounts payable of the Company (the “Subject Debts”)"

Unregistered Sales of Equity Securities regulatory

"Item 3.02. Unregistered Sales of Equity Securities."

Section 3(a)(10) of the Securities Act regulatory

"pursuant to an exemption from the registration requirements under Section 3(a)(10) of the Securities Act."

NYSE American market

"when the NYSE American approved the issuance of the shares."

NYSE American is a stock exchange where companies can list their shares to be bought and sold by investors. It functions like a marketplace, helping businesses raise money and providing investors with opportunities to buy ownership in these companies. Its role is important because it facilitates the trading of smaller or emerging companies, offering investors access to a broader range of investment options.

Understanding 8-K Material Events →

false 0001355848 0001355848 2026-04-20 2026-04-20 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

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): April 20, 2026

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”) wherein the Company agreed to issue an aggregate of 2,553,047 shares of its common stock to CCI in exchange for the settlement of certain past due obligations and accounts payable of the Company (the “Subject Debts”) in the aggregate amount of $1,143,884, (the “Initial Settlement Amount”) and an additional amount of $315,000 (the “Additional Settlement Amount”). On April 13, 2026, the Circuit Court of the Twelfth Judicial Circuit in and for Sarasota County, Florida (the “Florida Circuit Court”) entered an order approving the Agreement. The Agreement became binding upon the parties on April 20, 2026, 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 obligation, pursuant to an exemption from the registration requirements under Section 3(a)(10) of the Securities Act.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description
10.1		The Agreement and Stipulation, dated as of April 8, 2026
104		The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

* The Company agrees to furnish supplementally a copy of any omitted exhibit and schedule to the SEC upon request

2

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 24, 2026	By:	/s/ Andy Heyward
	Name:	Andy Heyward
	Title:	Chief Executive Officer

3

FAQ

What agreement did Kartoon Studios (TOON) enter with Continuation Capital, Inc.?

Kartoon Studios entered a material definitive Agreement with Continuation Capital, Inc. to settle certain past due obligations and accounts payable. The company will pay using newly issued common shares instead of cash under court and NYSE American approvals.

How many Kartoon Studios (TOON) shares will be issued to settle the obligations?

Kartoon Studios agreed to issue 2,553,047 shares of its common stock to Continuation Capital, Inc. These shares are being used to settle specified past due obligations and an additional settlement amount under the court-approved Agreement.

What amounts of Kartoon Studios (TOON) debt are being settled in this transaction?

The Agreement settles Subject Debts of $1,143,884 and an Additional Settlement Amount of $315,000. Together, these obligations are being satisfied through the issuance of 2,553,047 Kartoon Studios common shares to Continuation Capital, Inc.

On what basis is Kartoon Studios (TOON) calculating the share issuance to Continuation Capital?

Kartoon Studios will issue the shares at a rate of 1.75 shares per dollar of its obligations. This exchange ratio applies to the specified Subject Debts and Additional Settlement Amount covered by the Agreement with Continuation Capital, Inc.

What approvals did Kartoon Studios (TOON) obtain for this share-for-debt settlement?

A Florida Circuit Court approved the Agreement on April 13, 2026, and NYSE American approved the share issuance on April 20, 2026. These approvals made the Agreement binding and allowed Kartoon Studios to proceed with issuing the settlement shares.

Under what securities law exemption is Kartoon Studios (TOON) issuing these shares?

Kartoon Studios is issuing the settlement shares as an unregistered sale of equity securities under Section 3(a)(10) of the Securities Act. This exemption applies when a court approves the exchange to satisfy bona fide claims against the company.

Filing Exhibits & Attachments

4 documents

Agreements & Contracts

• EX-10.1 THE AGREEMENT AND STIPULATION, DATED AS OF APRIL 8, 2026 87.8 KB

Other Documents

• EX-101 XBRL SCHEMA FILE 2.9 KB
• EX-101 XBRL LABEL FILE 33.4 KB
• EX-101 XBRL PRESENTATION FILE 21.8 KB