TOON · Kartoon Studios Inc.

Kartoon Studios entered into a Settlement Agreement and Stipulation with Continuation Capital, Inc. (CCI) to resolve outstanding liabilities totaling $1,458,884 ($1,143,884 initial settlement amount plus $315,000 additional settlement amount). The Company will issue 2,553,047 shares of common stock at a rate of 1.75 shares per dollar of obligation. The shares are being issued under the Section 3(a)(10) exemption from registration, following a fairness hearing by the Circuit Court of the Twelfth Judicial Circuit in Sarasota County, Florida, which approved the agreement on April 13, 2026. The NYSE American approved the share issuance on April 20, 2026, making the agreement binding. The agreement includes a beneficial ownership limitation of 4.99% and an aggregate cap of 19.99% of outstanding shares without shareholder approval. Additionally, CCI is restricted from selling more than 25% of the average 10-day trading volume without written authorization. The Company has reserved 2,553,047 shares and must increase authorized shares if necessary to fulfill its obligations. This transaction allows Kartoon Studios to settle debts without cash outlay, but results in significant dilution for existing shareholders.