Note 14: Stock Options

On August 27, 2020, the Company’s stockholders approved the adoption of the Kartoon Studios, Inc. 2020 Equity Incentive Plan (as amended, the ”2020 Plan”). The 2020 Plan replaced the previously adopted 2015 Incentive Plan (the “2015 Plan”). The maximum number of shares available for issuance was initially equal to the sum of (i) 3,000,000 shares of common stock and (ii) the number of shares of common stock remaining available for issuance under the 2015 Plan, which was then equal to 216,767 shares. On May 23, 2023, the Company’s stockholders approved the adoption of an Amended and Restated 2020 Equity Incentive Plan, which provided for the maximum number of shares of common stock available for issuance under the 2020 Plan to be increased by 5,000,000 shares. Subsequently, on May 14, 2025, the Company’s stockholders approved a further amendment and restatement of the 2020 Plan, providing for an additional increase of 5,000,000 shares of common stock authorized for issuance under the plan. As of September 30, 2025, the maximum number of shares available for issuance was 13,216,767.

During the nine months ended September 30, 2025, the Company granted options to purchase 100,000 shares of common stock to the music composer on the Winnie & Friends title song, with weighted-average grant-date fair market value of $39,260. The options vested immediately upon grant.

The fair value of the options granted during the nine months ended September 30, 2025 was calculated using the Black-Scholes-Merton (“BSM”) option pricing model based on the following assumptions:

During the nine months ended September 30, 2024, the Company did not grant any stock options.

The following table summarizes the Company’s option activity:

During the three months ended September 30, 2025, the Company did not recognize any share-based compensation expense related to stock options.

During the three months ended September 30, 2024, the Company recognized $23,804 in share-based compensation expense related to stock options.

During the nine months ended September 30, 2025 and 2024, the Company recognized $24,699 and $0.1 million, respectively, in share-based compensation expense related to stock options included in General and Administrative Expenses on the Company’s condensed consolidated statements of operations. As of September 30, 2025, the Company had no unrecognized share-based compensation expense related to outstanding stock options. The outstanding options as of September 30, 2025 had an aggregated intrinsic value of zero.