Risk Factors Update Summary

• Kartoon Studios, Inc. was renamed and transferred to NYSE American from Nasdaq on June 26, 2023.
• Material misstatements in financial statements for periods ending March 31, 2023, June 30, 2023, and September 30, 2023.
• The company exercised warrants to purchase 2,311,550 shares at $2.50 per share on June 26, 2023.
• Management developing remediation plan for material weaknesses in internal control over financial reporting.
• Series C Preferred Stock dividend declared on September 21, 2023, with 1,000,000 votes per share.
• Increase in outstanding shares of common stock from 32,018,147 to 33,059,367.
• Net revenues increased from $62.3 million in 2022 to $44.1 million in 2023.
• Increase in shares underlying outstanding options from 1,351,939 to 1,421,985 and RSUs from 1,939,020 to 2,067,672.
• Full-time employees decreased from 743 to 242, and independent contractors decreased from 57 to 40 in 2023.
• Licensing agreements increased from over 40 to over 60, with revenue concentration from four customers at 74.4%.
• Distribution footprint expanded to over 61 territories with the launch of Kartoon Channel! WW.