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Kartoon Studios, Inc. (NYSE:TOON) announced new employment agreements with two senior executives and disclosed a share issuance to settle outstanding obligations, according to a press release statement based on a recent SEC filing. The micro-cap entertainment company, currently valued at approximately $40.54 million with shares trading at $0.74, has seen its stock surge 20.5% over the past week despite ongoing financial challenges. InvestingPro analysis indicates the company appears slightly undervalued based on its Fair Value assessment.
The company entered into a new executive employment agreement with Chief Financial Officer Brian Parisi on November 24. Under the agreement, Mr. Parisi will continue as CFO for a two-year term beginning January 1, 2026, with an annual base salary of $375,000 in the first year and $400,000 in the second year. The agreement includes eligibility for an annual performance bonus, subject to achieving yearly targets, and a grant of 500,000 restricted stock units vesting pro rata over three years.
On the same day, Kartoon Studios also signed a new executive employment agreement with Chief Operating Officer and General Counsel Michael Jaffa. Mr. Jaffa will serve in his roles for a three-year term effective November 14, 2025, starting with an annual base salary of $450,000. His salary will increase by 5% on each anniversary of the agreement. Mr. Jaffa is also eligible for an annual performance bonus, a guaranteed $50,000 bonus in December 2025, and an award of 750,000 restricted stock units vesting pro rata over three years.These executive compensation packages come as InvestingPro data reveals the company is not profitable over the last twelve months, with a basic EPS of -$0.55. Investors seeking deeper insights into TOON’s financial health, which currently scores as "FAIR" on InvestingPro’s assessment scale, can access additional ProTips and comprehensive metrics through the platform.
In a separate development, Kartoon Studios entered into an agreement with Continuation Capital, Inc. to satisfy obligations totaling $968,612.79 by issuing up to 1,705,071 shares of common stock. The Circuit Court of the Twelfth Judicial Circuit in Sarasota County, Florida, approved the agreement on November 18, and the NYSE American approved the share issuance on November 26. The shares will be issued at a rate of 1.75 shares per dollar of obligation under an exemption from registration requirements pursuant to Section 3(a)(10) of the Securities Act of 1933.
All information is based on a press release statement and details disclosed in the company’s recent SEC filing.
In other recent news, Kartoon Studios reported a 13% year-over-year increase in third-quarter revenue, reaching $9.9 million, with a year-to-date total of $29.7 million, marking a 28% rise compared to the previous year. The company also secured $7.3 million in institutional financing, aimed at expanding its content offerings. Additionally, Kartoon Studios announced a strategic partnership with Shriners Children’s, providing free access to its Kartoon Channel! and Ameba TV across all Shriners Children’s healthcare facilities nationwide. This collaboration will allow patients and families to enjoy family-friendly content through hospital media systems and patient tablets.
The company successfully completed a $7.3 million equity offering, issuing 3 million shares of common stock and pre-funded warrants for up to 6.9 million shares in a registered direct offering. In a concurrent private placement, common warrants for up to 9.9 million shares were also included. Furthermore, Kartoon Studios appointed Jeffrey Schlesinger, former President of Warner Bros. Worldwide Television Distribution, to its Board of Directors. Schlesinger brings extensive experience in global media, having managed Warner Bros.’ television distribution across more than 220 territories.
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