Item 1.01 Entry into a Material Definitive Agreement. On July 1, 2026, the Board of Directors (the “ Board”) of Kartoon Studios, Inc., a Nevada corporation (the “ Company”), approved and adopted a preferred stock rights agreement and authorized and declared a dividend distribution of one right (each, a “ Right”) for each outstanding share of common stock, par value $0.001 per share (the “ Common Stock”), of the Company to stockholders of record as of the close of business on July 13, 2026 (the “ Record Date”). The complete terms of the Rights are set forth in a Preferred Stock Rights Agreement (the “ Rights Agreement”), dated as of July 1, 2026, by and between the Company and VStock Transfer, LLC, a California limited liability company, as rights agent. In general terms, the Rights Agreement imposes significant dilution upon any person or group (other than the Company and certain other Exempt Persons (as defined below)), that is or becomes the beneficial owner of ten percent (10%) or more of the Common Stock without the prior approval of the Board following the first public announcement by the Company of the adoption of the Rights Agreement. The term “beneficial ownership” is defined in the Rights Agreement and, as more fully discussed below, includes, among other things, certain derivative arrangements. The following is a summary of the terms of the Rights Agreement. The summary does not purport to be complete and is qualified in its entirety by reference to the complete text of the Rights Agreement, a copy of which is attached hereto as Exhibit 4.1 and is incorporated herein by reference. The Rights. Each Right entitles its registered holder, subject to the terms of the Rights Agreement, to purchase from the Company one one-thousandth of a share of Series D Junior Participating Preferred Stock, par value $0.001 per share (the “ Series D Preferred Stock”), of the Company at a purchase price of $3.75 per Right, subject to adjustment (the “ Purchase Price”). The Rights will attach to any shares of Common Stock that become outstanding after the Record Date and prior to the earlier of the Distribution Time (as defined below), the Redemption Date (as defined below), the Final Expiration Time (as defined below), and in certain other circumstances described in the Rights Agreement. Until the Distribution Time, the Rights are associated with Common Stock and evidenced by Common Stock certificates or, in the case of uncertificated shares of Common Stock, the book-entry account that evidences record ownership of such shares, which will contain a notation incorporating the Rights Agreement by reference, and the Rights are transferable with and only with the underlying shares of Common Stock. Until the Distribution Time, the surrender for transfer of any shares of Common Stock will also constitute the transfer of the Rights associated with those shares and the Rights shall only trade with the Common Stock. As soon as practicable after the Distribution Time, separate Rights certificates will be mailed to holders of record of Common Stock as of the Distribution Time. From and after the Distribution Time, the separate Rights certificates alone will represent the Rights. The Rights are not exercisable prior to the Distribution Time and, thereafter, become exercisable only after such time as the Rights become no longer redeemable by the Company. Upon the Distribution Time, any Rights held by an Acquiring Person (as defined below), its affiliates and associates, and certain transferees thereof become null and void and may not be exercised. 2 Exercisability; Separation and Distribution of Rights. Subject to certain exceptions and the Rights becoming no longer redeemable, the Rights become exercisable and will be transferrable separately from the Common Stock from and after the “ Distribution Time,” which occurs upon the earlier of: