Kartoon Studios, Inc. Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of loss before income tax benefit expense


	Year Ended December 31,
	2025			2024
United States	$	(19,217	)	$	(14,812	)
Foreign		(5,616	)		(6,172	)
Loss Before Income Tax Benefit	$	(24,833	)	$	(20,984	)

Schedule of components of income tax benefit


	Year Ended December 31,
	2025		2024
Current:
Federal	$	–	$	–
State		–		(12	)
Foreign		–		62
Current expense		–		50
Deferred:
Federal		21		(7	)
State		46		–
Foreign		68		–
Deferred benefit		135		(7	)

Income Tax Benefit	$	135	$	43

Schedule of deferred tax liability

Schedule of deferred tax liability
	As of December 31,
	2025			2024
Deferred Tax Assets:
Net Operating Loss Carryover	$	47,937		$	52,747
Capital Loss Carryover		2,127			–
Lease Liability		1,564			1,811
Stock Compensation		523			765
Investments		3,774			–
Marketable Securities		1,647			24
Other		1,598			3,300
Total Gross Deferred Tax Assets		55,396			58,647
Less: Valuation Allowance		(51,547	)		(54,046	)
Deferred Tax Assets, net		3,849			4,601
Deferred Tax Liabilities:
Right-of-Use Assets		(1,449	)		(1,663	)
Intangible Assets		(3,618	)		(4,239	)
Other		(7	)		–
Total Gross Deferred Tax Liabilities		(5,074	)		(5,902	)
Deferred Tax Liability, net	$	(1,225	)	$	(1,301	)

Schedule of income tax provision

Schedule of income tax provision
	Year Ended December 31, 2025
	Dollars			Percentages
U.S. Federal Statutory Tax Rate	$	(5,215	)		21.0	%
State and Local Income Taxes, Net of Federal Income Tax Effect ⁽¹⁾		(46	)		0.2	%
Foreign Tax Effects
Canada
Statutory tax rate difference between Canada and U.S.		(186	)		0.7	%
Changes in valuation allowances		607			(2.4	)%
Other		197			(0.8	)%
Provincial tax		494			(2.0	)%
Changes in Valuation Allowances		(1,402	)		5.6	%
Nontaxable or Nondeductible Items
Other		600			(2.4	)%
Other Adjustments
Intercompany Transactions		4,071			(16.4	)%
Adjustments to Deferred Items		754			(3.0	)%
Other		(9	)		0.0	%

Effective Tax Rate	$	(135	)		0.5	%

(1)	State taxes in California and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category.

As previously disclosed for the years ended December 31, 2024, prior to the adoption of ASU 2023-09, the table below is a reconciliation of the components that caused the Company’s (provision) benefit for income taxes to differ from amounts computed by applying the U.S. federal statutory rate:


	Year Ended December 31, 2024
Income Tax Benefit Computed at the Statutory Federal Rate	$	4,406
State Income Taxes, Net of Federal Tax Effect		716
Stock Compensation		(895	)
Goodwill Impairment		–
Warrants		(207	)
Other		(165	)
Non-U.S. operations		368
Valuation Allowance		(4,180	)
Income Tax Benefit	$	43