Kartoon Studios (TOON) Files for 7.5M Share and Warrant Offering

Kartoon Studios (NYSE: TOON) has filed the following:

We are offering on a best efforts basis up to 7,500,000 shares of our common stock, par value $0.001 (the “Common Stock”), together with a Series A warrant to purchase up to 7,500,000 shares of our Common Stock and a Series B warrant to purchase up to 7,500,000 shares of our Common Stock. Each share of Common Stock, or a pre-funded warrant in lieu thereof, is being sold together with a Series A common warrant to purchase one share of Common Stock (the “Series A Common Warrant”) and a Series B common warrant to purchase one share of Common Stock (the “Series B Common Warrant” and together with the Series A Common Warrant, the “Common Warrants”). The shares of Common Stock and Common Warrants are immediately separable and will be issued separately in this offering, but must be purchased together in this offering. The assumed public offering price for each share of Common Stock and accompanying Common Warrants is $0.60, which was the closing price of our Common Stock on the NYSE American LLC (“NYSE American”) December 13, 2024. Each Common Warrant will have an exercise price per share of 100% of the offering price per share of Common Stock and accompanying Common Warrants and will be exercisable on or after the effective date of stockholder approval of the issuance of the shares upon exercise of the Common Warrants (the “Stockholder Approval”) and the NYSE American approves of the supplemental listing application related to such Stockholder Approval. Each Series A Common Warrant will expire on the 5-year anniversary of the initial exercise date and each Series B Common Warrant will expire on the eighteen-month anniversary of the initial exercise date.

We are also offering to certain purchasers whose purchase of shares of Common Stock in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock immediately following the consummation of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded warrants (the “Pre-Funded Warrants”), in lieu of shares of Common Stock that would otherwise result in such purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock. The public offering price of each Pre-Funded Warrant and accompanying Common Warrants will be equal to the price at which one share of Common Stock and accompanying Common Warrants is sold to the public in this offering, minus $0.001, and the exercise price of each Pre-Funded Warrant will be $0.001 per share. The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. The Pre-Funded Warrants and Common Warrants are immediately separable and will be issued separately in this offering, but must be purchased together in this offering. For each Pre-Funded Warrant we sell, the number of shares of Common Stock we are offering will be decreased on a one-for-one basis. This prospectus also covers the shares of Common Stock issuable from time to time upon the exercise of the Pre-Funded Warrants, Common Warrants and placement agent warrants.

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