Kartoon Studios, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

Subsequent Events	3 Months Ended
Mar. 31, 2022
Subsequent Events [Abstract]
Subsequent Events	Note 24: Subsequent Events On April 6, 2022, the Company completed its acquisition of WOW whereby on October 26, 2021, the Company’s wholly-owned subsidiary, 1326919 B.C. LTD., a corporation existing under the laws of the Province of British Columbia and WOW, a corporation existing under the laws of the Province of British Columbia, entered into an Arrangement Agreement to effect a transaction among the parties by way of a plan of arrangement under the arrangement provisions of Part 9, Division 5 of the Business Corporations Act. The Company purchased 100% of WOW’s issued and outstanding shares for approximately $38.3 million in cash and 11,057,000 shares of the Company’s common stock. The Company has not completed its initial accounting for the business combination which will be accounted for using the acquisition method of accounting. The fair value of the assets and liabilities are still to be determined. On April 5, 2022, the Company exercised its subscription rights to purchase an additional 914,284 shares of YFE’s common stock at 3.00 EUROS per share, increasing the number of shares held by the Company to 6,857,132 shares and its ownership in YFE to 48.2%. On April 7, 2022, the Company issued 703,125 shares of the Company’s common stock valued at $0.6 million, which represented delivery of 25% of the CEO’s RSUs that vested related to the satisfaction of performance-based criteria. During April, 2022, pursuant to his employment agreements, Andy Heyward, the Company’s CEO, was paid $87,500 in Executive Producer fees and $55,000 as part of his quarterly discretionary bonus. During the second quarter of 2022, the Company borrowed an additional $2.2 million from its investment margin account. On April 25,2022, in the matter of Harold Chizick and Jennifer Chizick v. Genius Brands International, Inc., ChizComm Ltd., Index No. 650278/2022, the Company filed a Motion for Partial Dismissal of the Plaintiffs’ Amended Complaint seeking (1) dismissal of Plaintiffs’ claims for Indemnification and Defamation and (2) a stay of Plaintiffs’ claim for Breach of Escrow Agreement pending the required arbitration of this claim. This Motion has not yet been ruled on and the case remains at the pleading stage with no trial date set.

Subsequent Events

3 Months Ended

Mar. 31, 2022

Note 24: Subsequent Events

On April 6, 2022, the Company completed its acquisition of WOW whereby on October 26, 2021, the Company’s wholly-owned subsidiary, 1326919 B.C. LTD., a corporation existing under the laws of the Province of British Columbia and WOW, a corporation existing under the laws of the Province of British Columbia, entered into an Arrangement Agreement to effect a transaction among the parties by way of a plan of arrangement under the arrangement provisions of Part 9, Division 5 of the Business Corporations Act. The Company purchased 100% of WOW’s issued and outstanding shares for approximately $38.3 million in cash and 11,057,000 shares of the Company’s common stock. The Company has not completed its initial accounting for the business combination which will be accounted for using the acquisition method of accounting. The fair value of the assets and liabilities are still to be determined.

On April 5, 2022, the Company exercised its subscription rights to purchase an additional 914,284 shares of YFE’s common stock at 3.00 EUROS per share, increasing the number of shares held by the Company to 6,857,132 shares and its ownership in YFE to 48.2%.

On April 7, 2022, the Company issued 703,125 shares of the Company’s common stock valued at $0.6 million, which represented delivery of 25% of the CEO’s RSUs that vested related to the satisfaction of performance-based criteria.

During April, 2022, pursuant to his employment agreements, Andy Heyward, the Company’s CEO, was paid $87,500 in Executive Producer fees and $55,000 as part of his quarterly discretionary bonus.

During the second quarter of 2022, the Company borrowed an additional $2.2 million from its investment margin account.

On April 25,2022, in the matter of Harold Chizick and Jennifer Chizick v. Genius Brands International, Inc., ChizComm Ltd., Index No. 650278/2022, the Company filed a Motion for Partial Dismissal of the Plaintiffs’ Amended Complaint seeking (1) dismissal of Plaintiffs’ claims for Indemnification and Defamation and (2) a stay of Plaintiffs’ claim for Breach of Escrow Agreement pending the required arbitration of this claim. This Motion has not yet been ruled on and the case remains at the pleading stage with no trial date set.