Kartoon Studios announces $7.3M financing with single insitutional investor

Kartoon Studios (TOON) entered into a securities purchase agreement with a single institutional investor for the purchase and sale of approximately $7.3M of equity in the Company. The closing of the Offering is expected to occur on or about October 22, 2025, subject to the satisfaction of customary closing conditions, including approval by NYSE American. The gross proceeds from the Offering are expected to be approximately $7.3M before deducting placement agent fees and other offering expenses and assuming that none of the common warrants are exercised. The potential additional gross proceeds to the Company from the common warrants, if fully exercised on a cash basis, will be approximately $7.3M. No assurance can be given that any of the common warrants will be exercised. The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes. This capital infusion will fuel the global launch and marketing of the upcoming Hundred Acre Wood’s Winnie & Friends, Stan Lee Universe expansion, Bitcoin Brigade rollout, and ongoing growth and content acquisition for Kartoon Channel!’s streaming service. The investor will purchase 3,000,000 shares of common stock and pre-funded warrants to purchase up to 6,903,049 shares of common stock in a registered direct offering and common warrants to purchase up to 9,903,049 shares of common stock in a concurrent private placement . The combined purchase price is $0.738 per each share of common stock and accompanying common warrant and $0.737 per each pre-funded warrant and accompanying common warrant. The common warrants issued pursuant to the concurrent private placement will have an exercise price of $0.738 per share, will be exercisable after the six month anniversary of the date of issuance, and at any time thereafter up to the fifth anniversary of the initial exercise date. The investor has agreed not to sell any Company securities until December 31, 2025, at a sale price less than $1.00. Dawson James Securities, Inc. is acting as placement agent for the Offering.