Kartoon Studios(TOON)

Search documents
Kartoon Studios Launches “Bitcoin Brigade: Adventures in Satoshi City” – a New Animated Children’s Series and Multi-Platform Ecosystem Built Around Bitcoin And DEFI
Globenewswire· 2025-08-20 13:15
Core Viewpoint - Kartoon Studios is launching "Bitcoin Brigade: Adventures in Satoshi City," an innovative animated series that integrates blockchain technology and Bitcoin education into children's entertainment, set to debut in fall 2026 on Kartoon Channel [1][10]. Group 1: Series Overview - "Bitcoin Brigade" invites children into Satoshi City, a digital realm where kids discover a portal connecting their world to a decentralized metropolis, blending action with educational themes [2]. - The series will feature dynamic anime-style visuals and original K-Pop music, aiming to create an immersive experience [2]. - The narrative includes young heroes representing Bitcoin and blockchain concepts, who defend their city from villains threatening the system [6]. Group 2: Business Model and Partnerships - Kartoon Studios is developing a comprehensive Bitcoin-native business platform, including The Satoshi Sparks Rewards System, allowing kids to earn digital currency by engaging with the series [8]. - The company is partnering with Bitkern, a leading Bitcoin mining company, to guide the series and its global launch strategy [2][4]. - A global licensing program will feature toys and apparel embedded with NFC chips to educate children about Bitcoin and blockchain technology [9]. Group 3: Educational Focus - The series aims to teach children about finance, ownership, and innovation through engaging storytelling and interactive challenges [3][8]. - An interactive mobile app will provide secure, kid-friendly Lightning wallets for earning and spending Sparks, with parental controls to promote responsible Bitcoin custodianship [9]. Group 4: Market Positioning - Kartoon Studios positions itself at the forefront of kids' entertainment and blockchain innovation, aiming for a revolutionary impact on entertainment, education, and gaming [1][11]. - The series will be accessible on multiple platforms, including Kartoon Channel and YouTube Kids, ensuring broad engagement [10].
Toon Media Networks, Streaming Division of Kartoon Studios (NYSE American: TOON), Posts Dramatic Growth in Q2 2025
Globenewswire· 2025-08-15 13:15
Core Insights - Toon Media Networks, a subsidiary of Kartoon Studios, has experienced significant audience growth, particularly through its flagship streaming service, Kartoon Channel! [2][9] - The company reported a 221% year-over-year increase in FAST views and a 45% sequential increase compared to Q1 2025 [9] - Under the leadership of Todd Steinman, Toon Media Networks is consolidating its global operations and expanding its reach across over 60 territories [8][9] Performance Metrics - Kartoon Channel! achieved a 221% increase in FAST views year-over-year and a 45% increase sequentially [9] - Original content such as Rainbow Rangers and Stan Lee's Superhero Kindergarten saw viewership increases of 80% and 47% year-over-year, respectively [9] - The user base for the Kartoon Channel! app expanded by 26% quarter-over-quarter [9] Strategic Initiatives - Toon Media Networks is leveraging a cross-platform strategy that includes FAST, AVOD, and SVOD to enhance audience engagement and monetization [2][7] - The division is recognized for its scalable, data-driven approach to content delivery and audience growth [7][10] - The company received Amazon's Operational Excellence Award for its performance on Prime Video, highlighting its effective execution [10] Market Expansion - Toon Media Networks now reaches viewers in over 60 territories, delivering billions of views annually across various platforms [9][11] - The division operates on major streaming platforms including YouTube, Amazon Prime Video, Roku, and more, ensuring extensive multi-platform distribution [9][11] Leadership and Vision - Todd Steinman is recognized as a thought leader in the industry, and his leadership is expected to drive further growth and recognition for the brand [8][9] - The company plans to make several material announcements across multiple business segments in the near future, indicating ongoing strategic initiatives [8]
Kartoon Studios(TOON) - 2025 Q2 - Quarterly Results
2025-08-14 13:15
Exhibit 99.1 KARTOON STUDIOS DELIVERS FIFTH CONSECUTIVE QUARTER OF REVENUE GROWTH; Q2 REVENUE SURGES 23% YEAR-OVER-YEAR, INCLUDING STRONG STREAMING PERFORMANCE AND OPERATIONAL EFFICIENCY G&A Expenses Fall Double Digits as Company Moves Toward Profitability in 2025 Kartoon Channel Streaming Service is Top Rated Children's Streaming App in Apple App Store; FAST Views Jump 221% Year-Over-Year Kartoon Channel SVOD Grows for 7th Consecutive Month; Wins Amazon Operational Excellence Award Mainframe Studios Revenu ...
Kartoon Studios(TOON) - 2025 Q2 - Quarterly Report
2025-08-14 13:01
[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Kartoon Studios reported 37% revenue growth to $19.8 million, but significant net losses and negative working capital raise going concern doubts Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | **$25,463** | **$34,664** | | Cash | $2,056 | $7,879 | | Accounts Receivable, net | $7,043 | $11,982 | | **Total Assets** | **$70,003** | **$85,467** | | **Total Current Liabilities** | **$30,360** | **$33,440** | | Accounts Payable | $6,772 | $11,954 | | Production Facilities, net | $10,609 | $9,220 | | **Total Liabilities** | **$40,328** | **$49,007** | | **Total Stockholders' Equity** | **$29,675** | **$36,460** | | **Working Capital** | **($4,897)** | **$1,224** | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Total Revenues** | **$19,783** | **$14,462** | | Production Services | $13,931 | $7,858 | | Content Distribution | $3,973 | $4,725 | | Loss from Operations | ($6,294) | ($10,955) | | **Net Loss Attributable to Kartoon Studios, Inc.** | **($12,689)** | **($12,918)** | | Net Loss per Share (Basic & Diluted) | ($0.27) | ($0.35) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($6,290) | ($2,654) | | Net Cash Provided by Investing Activities | $1,301 | $5,518 | | Net Cash Used in Financing Activities | ($273) | ($4,804) | | **Net Decrease in Cash and Restricted Cash** | **($5,817)** | **($1,354)** | | **Ending Cash and Restricted Cash** | **$2,568** | **$2,741** | - Management has substantial doubt about the company's ability to continue as a going concern due to historical net losses, **negative working capital of $4.9 million**, and **cash used in operations of $6.3 million** for the first six months of 2025[38](index=38&type=chunk) [Note 1: Organization, Business, and Going Concern](index=11&type=section&id=Note%201%3A%20Organization%20and%20Business) Kartoon Studios, a children's content company, faces substantial doubt about its going concern status due to historical losses and negative working capital - The company's core business includes original IP development, third-party production services through Mainframe Studios, a media agency (Beacon), and content distribution via platforms like Kartoon Channel[30](index=30&type=chunk)[33](index=33&type=chunk) - As of June 30, 2025, the company had **negative working capital of $4.9 million**, compared to positive working capital of $1.2 million at year-end 2024, indicating deteriorating short-term liquidity[38](index=38&type=chunk) - To improve liquidity after the quarter ended, the company sold certain assets, including Employee Retention Tax Credit receivables and **1,500,000 shares of Your Family Entertainment AG (YFE)**[38](index=38&type=chunk) [Note 2: Accounting Policies and Concentration of Risk](index=13&type=section&id=Note%202%3A%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Financial statements are U.S. GAAP compliant; a key risk is customer concentration, with four customers accounting for 85.9% of revenue - For the six months ended June 30, 2025, **four customers accounted for 85.9% of total revenue**, up from 66.7% from three customers in the same period of 2024[51](index=51&type=chunk) - As of June 30, 2025, **two customers accounted for 49.6% of total accounts receivable**[52](index=52&type=chunk) [Note 4: Investment in Your Family Entertainment AG (YFE)](index=16&type=section&id=Note%204%3A%20Investment%20in%20Equity%20Interest) The YFE investment's fair value decreased by $5.7 million due to stock price decline, leading to a revaluation loss and subsequent share sale - The fair value of the YFE investment decreased by **$5.7 million** from December 31, 2024, to June 30, 2025, due to a decline in YFE's stock price and foreign currency effects[60](index=60&type=chunk) - On July 14, 2025, the company sold **1.5 million YFE shares for €750,000** as part of its strategy to optimize its asset portfolio and improve liquidity[60](index=60&type=chunk)[134](index=134&type=chunk) [Note 16: Warrants](index=24&type=section&id=Note%2016%3A%20Warrants) Shareholder approval enabled reclassification of Series A and B warrants from liability to equity, eliminating future fair value adjustments - On May 14, 2025, shareholder approval allowed for the reclassification of Series A and B warrants from liability to equity[97](index=97&type=chunk) - The warrant liability of approximately **$5.7 million** was reclassified to additional paid-in capital, eliminating future fair value adjustments through earnings for these instruments[97](index=97&type=chunk) [Note 21: Segment Reporting](index=31&type=section&id=Note%2021%3A%20Segment%20Reporting) Content Production drove 42% revenue growth to $18.1 million, but both segments reported net losses, with overall loss narrowing slightly Segment Performance for Six Months Ended June 30 (in thousands) | Segment | Revenue 2025 | Revenue 2024 | Net Loss 2025 | Net Loss 2024 | | :--- | :--- | :--- | :--- | :--- | | Content Production and Distribution | $18,074 | $12,710 | ($11,531) | ($12,435) | | Media Advisory and Advertising Services | $1,709 | $1,752 | ($1,158) | ($483) | | **Total** | **$19,783** | **$14,462** | **($12,689)** | **($12,918)** | [Note 22: Subsequent Events](index=35&type=section&id=Note%2022%3A%20Subsequent%20Events) Post-quarter, Kartoon Studios sold YFE shares and ERTC claims, and entered a share exchange to improve liquidity and optimize assets - Sold **1,500,000 YFE shares for €750,000** on July 14, 2025[134](index=134&type=chunk) - Entered a non-cash agreement to exchange **348,127 YFE shares** for 348,127 shares of its own common stock held by F&M Film[135](index=135&type=chunk) - Agreed to sell **$0.9 million in ERTC refund claims** for an upfront cash payment of **$0.5 million** (55% of the claim amount)[136](index=136&type=chunk) [Management's Discussion and Analysis (MD&A)](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue grew 37% driven by Production Services, but liquidity worsened, raising going concern doubts, prompting capital raise and cost-saving plans [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Revenue increased 37% for six months, led by Production Services; G&A decreased, but Other Expense rose due to YFE investment revaluation loss Revenue Comparison for Three Months Ended June 30 (in thousands) | Revenue Stream | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Production Services | $7,359 | $5,095 | $2,264 | 44% | | Content Distribution | $1,992 | $2,396 | ($404) | (17%) | | **Total Revenue** | **$10,279** | **$8,384** | **$1,895** | **23%** | Revenue Comparison for Six Months Ended June 30 (in thousands) | Revenue Stream | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Production Services | $13,931 | $7,858 | $6,073 | 77% | | Content Distribution | $3,973 | $4,725 | ($752) | (16%) | | **Total Revenue** | **$19,783** | **$14,462** | **$5,321** | **37%** | - General and Administrative expenses decreased by **$2.6 million (18%)** for the six months ended June 30, 2025, compared to the prior year, due to lower professional fees, cost-saving initiatives, and reduced share-based compensation[159](index=159&type=chunk) - Other Expense, net for the six months ended June 30, 2025 was **$6.3 million**, a significant increase from $1.6 million in the prior year, primarily driven by a **$7.4 million loss on the revaluation of the YFE equity investment**[161](index=161&type=chunk)[162](index=162&type=chunk) [Liquidity, Going Concern, and Capital Resources](index=42&type=section&id=Liquidity%2C%20Going%20Concern%2C%20and%20Capital%20Resources) Liquidity significantly weakened with $5.8 million cash decrease and negative working capital, leading to substantial going concern doubt - Cash and restricted cash decreased by **$5.8 million** in the first six months of 2025, primarily due to **$6.3 million of cash used in operating activities**[164](index=164&type=chunk) - Working capital shifted from **$1.2 million** at Dec 31, 2024, to a deficit of **$4.9 million** at June 30, 2025, a decrease of **$6.1 million**[167](index=167&type=chunk) - Management plans to address the going concern issue by considering multiple alternatives, including the sale of equity or debt securities and implementing cost-saving measures[169](index=169&type=chunk)[170](index=170&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Kartoon Studios is exempt from providing this disclosure - The company is exempt from this disclosure requirement due to its status as a smaller reporting company[184](index=184&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of June 30, 2025, and a material weakness in IT general controls was remediated - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[186](index=186&type=chunk) - A previously identified material weakness related to inadequate segregation of duties in IT general controls was remediated, with the final phase completed in the second quarter of 2025[187](index=187&type=chunk)[188](index=188&type=chunk) [PART II - OTHER INFORMATION](index=47&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company faces ongoing securities class action and derivative lawsuits, with a Section 16(b) case awaiting summary judgment decisions - In the securities class action, the District Court has allowed a claim based on March 2020 statements to proceed, while dismissing others; the case is ongoing[193](index=193&type=chunk) - Several shareholder derivative lawsuits are stayed pending the outcome of the securities class action[200](index=200&type=chunk) - In a Section 16(b) lawsuit where the company is a nominal defendant, cross-motions for summary judgment have been filed and are awaiting a court decision[201](index=201&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) Substantial doubt exists about the company's going concern ability due to losses, negative working capital, and high customer concentration - There is substantial doubt about the company's ability to continue as a going concern, requiring it to raise additional capital to fund operations[206](index=206&type=chunk) - The company has a history of operating losses, incurring a **net loss of $12.9 million** for the six months ended June 30, 2025, and has an **accumulated deficit of $752.0 million**[206](index=206&type=chunk)[208](index=208&type=chunk) - During Q2 2025, **four customers accounted for 85.9% of total revenue**, highlighting significant customer concentration risk[212](index=212&type=chunk) - Potential U.S. tariffs on foreign-produced content could adversely impact the business, as its primary animation production is in Canada[210](index=210&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period [Other Information](index=51&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements this quarter [Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed with the Form 10-Q, including corporate governance and certifications
Kartoon Channel! and Ameba Deliver Triple-Digit Year Over Year Growth in Early 2025
Globenewswire· 2025-05-28 13:15
Core Insights - Kartoon Studios is experiencing significant growth, with a reported 116% year-over-year earnings increase for January and February 2025 compared to the same period in 2024, driven by the success of Kartoon Channel! and Ameba's domestic business [4] - The company has expanded its distribution to 71 territories, reaching an audience of 2.8 billion, and is focusing on international operations and monetization under the leadership of Todd Steinman, who has been promoted to oversee global business [5][3] - The introduction of AI-assisted dubbing technology is aiding in the efficient localization of content, facilitating quicker entry into new international markets [8] Company Developments - Todd Steinman has been promoted to President of Toon Media Networks Worldwide, reflecting the company's strategy to accelerate international growth and capitalize on digital platform momentum [3][5] - The company has doubled its performance across FAST channels, including platforms like Tubi, Pluto TV, and Xumo, and recently launched a 24/7 Rainbow Rangers channel on Google TV Freeplay, enhancing its domestic reach [7] - Kartoon Studios has established a diversified children's service model that includes AVOD, SVOD, and FAST channels, contributing to its rapid growth and profitability [6] Strategic Focus - The company aims to build on its momentum in international markets, emphasizing profitability, brand impact, and family-oriented content [9] - The combination of various streaming models has created a scalable and profitable platform for children's programming, positioning Kartoon Channel! as a leader in the next generation of AVOD distribution [6][12] - The operational excellence of Kartoon Studios has been recognized, including an award from Amazon for 100% on-time delivery, highlighting its commitment to quality and efficiency [14]
Kartoon Studios(TOON) - 2025 Q1 - Quarterly Results
2025-05-15 13:15
[Overview and Financial Highlights](index=1&type=section&id=Overview%20and%20Financial%20Highlights) Kartoon Studios reported strong Q1 2025 results with **56.4% revenue growth**, improved operating loss, reduced G&A, and is on track for overall profitability by year-end Q1 2025 Financial Highlights (YoY) | Metric | Change | | :--- | :--- | | Total Revenue | ▲ 56.4% | | Production Services Revenue | ▲ 137.9% | | Operating Loss | ▼ 51.1% (Improved) | | G&A Expenses | ▼ 24.9% | - The company's growth is supported by several key factors: a profitable and cash-generating studio (Mainframe), a profitable U.S. kids' streaming service (Kartoon Channel!), zero long-term debt, and high-potential upcoming franchises[4](index=4&type=chunk) - CEO Andy Heyward stated that a year of optimizing the business by lowering costs, deepening partnerships, and expanding distribution has positioned the company to unlock long-term shareholder value[3](index=3&type=chunk) [Business Segment Performance](index=2&type=section&id=Business%20Segment%20Performance) Key business segments demonstrated strong performance, with Mainframe Studios achieving profitability and Kartoon Channel! doubling watch time and maintaining its 1 app store ranking [Mainframe Studios](index=2&type=section&id=Mainframe%20Studios) Mainframe Studios achieved profitability in Q1 2025, driven by strong partnerships and high revenue visibility with over **90% of 2025 revenue already contracted** - Mainframe Studios achieved profitability in Q1 2025, driven by deep partnerships with industry leaders such as Disney, Netflix, Sony Kids, and Mattel[7](index=7&type=chunk) - The studio is producing content for major global franchises including Barbie, CoComelon, SuperKitties, and Unicorn Academy[8](index=8&type=chunk) - Over **90% of its 2025 revenue is already contracted**, and its production backlog extends into 2026, providing significant financial visibility and operational stability[8](index=8&type=chunk) [Kartoon Channel!](index=3&type=section&id=Kartoon%20Channel%21) Kartoon Channel! maintained its 1 kids' streaming app position on the Apple App Store, significantly increasing viewer engagement and expanding its global reach to over **61 countries** - Remains the **1 kids' streaming app on the Apple App Store**, consistently outperforming YouTube Kids, Netflix, and Disney+[12](index=12&type=chunk) - In Q1, FAST (Free Ad-Supported Streaming Television) channel watch time more than doubled year-over-year[12](index=12&type=chunk) - Global reach now spans over **61 countries** and more than **1.5 billion potential viewers** through distributors like Samsung TV Plus, Roku, and Prime Video[12](index=12&type=chunk) [Strategic Initiatives and IP Development](index=5&type=section&id=Strategic%20Initiatives%20and%20IP%20Development) Kartoon Studios is focused on building global merchandising franchises from its IP, including "Hundred Acre Woods' Winnie and Friends" and "Stan Lee's The Excelsiors," to create long-term monetization opportunities - The company is building "Hundred Acre Woods' Winnie and Friends" into what it expects will be a large global merchandising franchise[17](index=17&type=chunk) - The project is led by Executive Producer Linda Woolverton, the screenwriter for Disney's "Beauty and the Beast" and "The Lion King," and creative branding expert John Rivoli, known for his work on "Harry Potter" and "Batman"[17](index=17&type=chunk)[18](index=18&type=chunk) - Other key IP in development includes "Stan Lee's The Excelsiors" and a new animated Christmas movie, which are expected to build brand equity and long-term monetization[19](index=19&type=chunk) [Financial Management and Outlook](index=5&type=section&id=Financial%20Management%20and%20Outlook) The company demonstrated financial discipline with reduced G&A and a debt-free balance sheet, projecting company-wide profitability by Q4 2025 based on sustained revenue growth - CFO Brian Parisi emphasized the company's leaner focus, noting a nearly **25% cut in G&A**, a 4th consecutive quarter of revenue growth, and over **50% improvement in operating losses**[20](index=20&type=chunk) - With its current momentum, the company expects to achieve company-wide profitability by the fourth quarter of 2025[21](index=21&type=chunk) Key Financial Metrics as of March 31, 2025 | Metric | Value | | :--- | :--- | | Revenue (for the quarter) | $9.5 million | | Current Assets | $25.1 million | | Stockholders' Equity | $30.1 million | | Long-Term Debt | Zero | [About Kartoon Studios](index=6&type=section&id=About%20Kartoon%20Studios) Kartoon Studios is a global entertainment company specializing in children's and family content, owning original IP, Mainframe Studios, and the highly-rated Kartoon Channel! streaming service - The company creates, produces, distributes, and licenses premium entertainment brands for children and families globally[23](index=23&type=chunk) - It owns a controlling interest in Stan Lee Universe, managing the creator's post-Marvel IP, name, and likeness[24](index=24&type=chunk) - Its animation division, Mainframe Studios, has produced over **1,000 half-hour episodes** and partners with major clients like Disney and Netflix[25](index=25&type=chunk) - The company operates multiple media networks, including Kartoon Channel!, which is the **1 kids' app on the Apple App Store**[26](index=26&type=chunk) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) This section provides a standard legal disclaimer, cautioning that future expectations are subject to significant risks and uncertainties, and actual results may differ materially - This section contains "forward-looking statements" regarding the company's intent, belief, or current expectations, including reaching sustained profitability in 2025[30](index=30&type=chunk) - These statements are based on current estimates and are subject to various risks and uncertainties, such as general economic conditions, competitive pressure, and the ability to protect intellectual property[30](index=30&type=chunk)
Kartoon Studios Q1 2025 Revenue Soars 56% Over Prior Year - Company on Track for Profit By End of Year
Globenewswire· 2025-05-15 13:15
Core Insights - Kartoon Studios reported a significant revenue increase of 138% year-over-year and 29% sequentially, achieving profitability in its Mainframe Animation Unit and Kartoon Channel! [1][6][24] Financial Performance - Total revenue for Q1 2025 reached $9.5 million, with a 56.4% year-over-year increase [25] - Production services revenue surged by 137.9% [6] - Operating loss improved by 51.1% year-over-year and 11.9% sequentially [6] - General and administrative expenses were reduced by 24.9% [6] - The company maintains a debt-free balance sheet with zero long-term debt [6][24] Business Growth and Strategy - Mainframe Studios serves as a consistent revenue driver, with over 90% of its 2025 budget revenue already under contract [9] - Kartoon Channel! is the 1 kids' streaming app on the Apple App Store, outperforming competitors like Netflix and Disney+ [12][17] - The platform's global reach extends to over 1.5 billion potential viewers across 61+ countries [13] Intellectual Property and Future Projects - Upcoming franchises include "A Hundred Acre Woods' Winnie & Friends" and "Stan Lee's The Excelsiors," expected to contribute significantly to revenue [20][22] - The creative team behind "Winnie & Friends" includes industry veterans known for successful franchises, enhancing its market potential [21][22] Operational Efficiency - The company has focused on optimizing operations, resulting in a leaner structure and improved financial metrics [4][23] - With four consecutive quarters of revenue growth, Kartoon Studios is positioned for sustained profitability by the end of 2025 [24]
Kartoon Studios(TOON) - 2025 Q1 - Quarterly Report
2025-05-15 13:00
PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited Q1 2025 financial statements show revenue growth to **$9.5 million** but a **$6.6 million** net loss, with declining assets and negative working capital [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Current Assets** | | | | Cash | $2,263 | $7,879 | | Accounts Receivable, net | $7,562 | $11,982 | | Total Current Assets | $25,128 | $34,664 | | **Total Assets** | **$71,701** | **$85,467** | | **Current Liabilities** | | | | Accounts Payable | $5,963 | $11,954 | | Production Facilities, net | $7,376 | $9,220 | | Total Current Liabilities | $26,835 | $33,440 | | **Total Liabilities** | **$41,644** | **$49,007** | | **Total Stockholders' Equity** | **$30,057** | **$36,460** | - The company's working capital turned negative, from **$1.2 million** as of December 31, 2024, to negative **$1.7 million** as of March 31, 2025[39](index=39&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Total Revenues** | **$9,504** | **$6,078** | | Production Services | $6,572 | $2,763 | | Content Distribution | $1,981 | $2,329 | | Total Operating Expenses | $12,583 | $12,372 | | Loss from Operations | $(3,079) | $(6,294) | | **Net Loss** | **$(6,591)** | **$(7,064)** | | Net Loss Attributable to Kartoon Studios, Inc. | $(6,526) | $(7,045) | | **Net Loss per Share (Basic & Diluted)** | **$(0.14)** | **$(0.20)** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Provided by (Used in) Operating Activities | $(1,822) | $3,845 | | Net Cash Provided by (Used in) Investing Activities | $(1,186) | $2,560 | | Net Cash Used in Financing Activities | $(2,567) | $(7,891) | | **Net Decrease in Cash and Restricted Cash** | **$(5,613)** | **$(1,332)** | | Beginning Cash and Restricted Cash | $8,385 | $4,095 | | **Ending Cash and Restricted Cash** | **$2,772** | **$2,763** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - The company announced a **$30.0 million** joint venture with Catalyst Venture Partners for a new "Winnie-the-Pooh" project, with Catalyst providing full production financing[35](index=35&type=chunk) - The company recorded a **$3.6 million** loss on the revaluation of its equity investment in Your Family Entertainment AG (YFE) due to a decrease in YFE's stock price, with ownership at **44.8%** as of March 31, 2025[61](index=61&type=chunk)[98](index=98&type=chunk) - The company has two operating segments: Content Production and Distribution, generating **$8.6 million** in revenue, and Media Advisory and Advertising Services, generating **$0.9 million** in revenue for Q1 2025[120](index=120&type=chunk)[121](index=121&type=chunk)[123](index=123&type=chunk) - In Q1 2025, four customers accounted for **85.1%** of total revenue, and three customers accounted for **53.2%** of total accounts receivable, indicating significant customer concentration risk[52](index=52&type=chunk)[53](index=53&type=chunk) - Subsequent to the quarter end, the fair value of the YFE investment continued to decline, with the share price dropping from **€1.81** on March 31, 2025, to **€1.19** on May 14, 2025[128](index=128&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes **56%** revenue growth to Production Services, despite tightened liquidity with a **$5.6 million** cash decrease and negative working capital, expecting future needs to be met by cost reductions and other initiatives Revenue by Segment (in thousands) | Revenue Source | Q1 2025 | Q1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Production Services | $6,572 | $2,763 | $3,809 | 138% | | Content Distribution | $1,981 | $2,329 | $(348) | (15)% | | Licensing and Royalties | $84 | $100 | $(16) | (16)% | | Media Advisory and Advertising Services | $867 | $886 | $(19) | (2)% | | **Total Revenue** | **$9,504** | **$6,078** | **$3,426** | **56%** | Operating Expenses (in thousands) | Expense Category | Q1 2025 | Q1 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Marketing and Sales | $186 | $444 | $(258) | (58)% | | Direct Operating Costs | $6,684 | $4,325 | $2,359 | 55% | | General and Administrative | $5,713 | $7,603 | $(1,890) | (25)% | | **Total Expenses** | **$12,583** | **$12,372** | **$211** | **2%** | - The company's liquidity position weakened, with cash and restricted cash decreasing by **$5.6 million** to **$2.8 million** as of March 31, 2025, resulting in negative working capital of **$1.7 million**[145](index=145&type=chunk)[149](index=149&type=chunk) - Management believes future cash needs can be met through cost reductions, working capital optimization, licensing advances, and potentially external sources like IRS tax credits or capital raises[148](index=148&type=chunk) - Other Expense, net, increased significantly to **$3.4 million** from **$0.6 million** in the prior year, primarily due to a **$3.6 million** loss on YFE equity revaluation and a **$0.9 million** loss on a debt settlement with YFE[144](index=144&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company is exempt from providing market risk disclosures due to its status as a "smaller reporting company" - The company is exempt from providing quantitative and qualitative disclosures about market risk because it qualifies as a "smaller reporting company"[163](index=163&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to a material weakness in IT General Controls, with a remediation plan expected to be completed in Q2 2025 - The CEO and CFO concluded that disclosure controls and procedures were ineffective as of March 31, 2025[165](index=165&type=chunk) - The ineffectiveness is due to a material weakness in Information Technology General Controls (ITGC), specifically related to inadequate design of user access controls and inadequate segregation of duties[166](index=166&type=chunk) - A remediation plan is in progress, including transitioning some administrative responsibilities to a third-party service provider, with completion expected in Q2 2025[167](index=167&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings.) The company faces ongoing legal proceedings, including a securities class action related to 'Rainbow Rangers' statements, stayed shareholder derivative actions, and a Section 16(b) lawsuit regarding alleged short-swing profits - In the ongoing securities litigation, most claims were dismissed, but a Section 10(b) claim regarding March 2020 'Rainbow Rangers' cartoon statements proceeds[172](index=172&type=chunk) - Several shareholder derivative lawsuits alleging breaches of fiduciary duty remain stayed pending the resolution of the main securities class action[179](index=179&type=chunk) - The company is a nominal defendant in a Section 16(b) lawsuit seeking to recover alleged short-swing profits from investors, with cross-motions for summary judgment pending[180](index=180&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors.) Key risks include a history of net losses, significant customer concentration, potential adverse impacts from U.S. trade policy changes, and a substantial stock overhang from outstanding shares and warrants - The company has a history of operating losses, incurring a net loss of **$6.6 million** for the three months ended March 31, 2025[185](index=185&type=chunk) - The business faces significant customer concentration risk, with four customers representing **85.1%** of total revenue in Q1 2025[189](index=189&type=chunk) - Potential changes in U.S. trade policy, including tariffs on foreign-produced content, could adversely affect the business due to its animation production operations in Canada[187](index=187&type=chunk) - A large number of shares available for sale from stock, warrants (**24.2 million**), and options could create an "overhang" effect, potentially causing the stock price to decline[190](index=190&type=chunk)[191](index=191&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) No unregistered sales of equity securities were reported during the period - None[192](index=192&type=chunk) [Other Information](index=45&type=section&id=Item%205.%20Other%20Information.) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[195](index=195&type=chunk) [Exhibits](index=46&type=section&id=Item%206.%20Exhibits.) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications under Sarbanes-Oxley Act Sections 302 and 906 - The report includes required certifications from the Chief Executive Officer and Chief Financial Officer[199](index=199&type=chunk)
Kartoon Studios(TOON) - 2024 Q4 - Annual Results
2025-03-31 13:33
Financial Performance - Total revenue for Q4 2024 increased by 8.2% sequentially and 7.0% year-over-year, reaching $9.4 million[3] - Production services revenue surged by 44.7% in Q4 2024 compared to Q4 2023, driven by strong demand for premium animation content[3] - Total operating expenses decreased by 66.0% in Q4 2024 compared to Q4 2023 and by 57.4% for the full year 2024 compared to 2023[3] - Loss from operations improved by 88.0% in Q4 2024 compared to Q4 2023, indicating a strong path towards profitability in 2025[3] Market Position and Audience Reach - Kartoon Channel! remains the 1 ranked streamer in the Apple App Store, reaching over 1.5 billion viewers worldwide across various platforms[6] - Mainframe Studios has over 90% of its 2025 revenue target already contracted, with a backlog of orders expected to surpass 2025 levels[4] Profitability and Growth Strategies - Beacon Media Group achieved profitability in 2024 through high-efficiency ads and data-driven strategies, poised for continued growth in 2025[9] - Frederator Networks turned profitable in 2024 and plans to expand e-commerce capabilities on YouTube and social media in 2025[6] - The company is poised for revenue growth and aims to achieve sustained profitability by 2025, driven by a rebound in its animation production pipeline and continued profits in its children's channel[23] - Current initiatives are guiding the company toward profitability in 2025 while operating at a sustainable expense level[23] - The company is well-positioned to capitalize on future growth opportunities and deliver long-term value for shareholders[23] Upcoming Projects and Releases - Upcoming animated series, "Hundred Acre Woods' Winnie and Friends" and "The Excelsiors," are set for broad launches in 2025 and 2026, expected to unlock substantial new revenue streams[8] - The company plans to release a sneak peek animation trailer for A.A. Milne's Winnie-the-Pooh, featuring two new female characters[23] - Development plans include Stan Lee's The Excelsiors, launching as a graphic novel with concurrent television and film adaptations overseen by Michael Uslan[23] - The company is collaborating with LiveOne to produce, publish, and distribute all music for its Winnie-the-Pooh films and series, including original songs and soundtracks[23] - The successful release of the animated Christmas movie is set for December 24, 2025[23] Risk Management and Forward-Looking Statements - The company acknowledges various risks and uncertainties that could affect its ability to sustain growth and profitability in 2025[23] - The company disclaims any obligation to update forward-looking statements except as required by law[23]
Kartoon Studios Reports Strong Business Results with 8.2% Sequential Revenue Growth for Q4 2024, Marking Third Consecutive Quarterly Increase
Newsfilter· 2025-03-31 13:10
Core Insights - Kartoon Studios has shown significant progress in 2024, with improvements in profitability and operational efficiency, positioning the company for continued growth in 2025 [3][12][14] Financial Performance - Total revenue for Q4 2024 increased by 8.2% compared to Q3 2024 and 7.0% compared to Q4 2023, marking the third consecutive quarter of revenue growth [5] - Mainframe Studios, the largest revenue-generating unit, achieved a 44.7% revenue increase in Q4 2024 compared to Q4 2023, driven by strong demand for high-quality animation [3][5] - Total operating expenses decreased by 66.0% in Q4 2024 compared to Q4 2023 and by 57.4% for the full year 2024 compared to 2023, reflecting effective operational efficiency initiatives [5] - Loss from operations improved by 88.0% in Q4 2024 compared to Q4 2023 and by 76.5% for the full year 2024 compared to 2023, indicating a strong path towards profitability [5] Business Segments - Kartoon Channel and Frederator Networks delivered strong results in 2024, benefiting from higher subscription revenues, distribution expansion, and increasing advertising revenue [4][7] - The family and kids' ad unit, Beacon Media Group, achieved profitability in 2024 through high-efficiency ads and data-driven strategies [12][14] - Upcoming animated series, including "Hundred Acre Wood's Winnie and Friends" and "Stan Lee Universe's The Excelsiors," are expected to launch in 2025 and 2026, contributing to future revenue streams [10][11] Market Position and Strategy - Kartoon Channel remains the 1 ranked streamer in the Apple App Store, surpassing competitors like YouTube Kids and Netflix, with a focus on children's safety [7] - The company is expanding its global content strategy, now present in over 61 territories, and plans to enter new markets in Asia, Europe, and Latin America in 2025 [8] - The emphasis on exclusive series, localized content, and ad-supported models has driven substantial revenue growth for Kartoon Channel [7][8] Future Outlook - The company is well-positioned for profitable growth in 2025, with over 90% of its 2025 revenue target already contracted and a backlog of orders expected to surpass 2025 levels [3][14] - Investments in infrastructure, technology, and key creators are expected to yield positive results, enhancing the company's ability to capitalize on growth opportunities [12][14]