Kartoon Studios, Inc PRE 14A, filed Jun 30, 2023

Kartoon Studios, Inc. (TOON)

PRE 14A 2023-06-30 For: 2023-08-25

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☒	Preliminary Proxy Statement
☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☐	Definitive Proxy Statement
☐	Definitive Additional Materials
☐	Soliciting Material Under Rule 14a-12

☒	No fee required.
☐	Fee previously paid with preliminary materials.
☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

	Sincerely,

	/s/ Andy Heyward
	Andy Heyward
	Chief Executive Officer and
	Chairman of the Board of Directors

TIME:			10:00 a.m., Pacific Standard Time

DATE:			Friday, August 25, 2023

PLACE:			Offices of Kartoon Studios, Inc. (the “Company”), at 190 N. Canon Drive, 4th Floor, Beverly Hills, CA 90210.

PURPOSES:

	1.	To elect nine (9) directors to serve one-year terms expiring in 2024 (Proposal 1);

	2.	To ratify the appointment of Baker Tilly US, LLP as the Company’s independent registered public accounting firm for our fiscal year ending December 31, 2023 (Proposal 2);

	3.	To approve a proposal to change the Company’s state of incorporation from Nevada to Delaware (Proposal 4);

	4.	To approve, by an advisory vote, the compensation of our named executive officers, as disclosed in this proxy statement (Proposal 6);

	5.	To approve, by an advisory vote, the frequency of holding future advisory votes on the compensation of our named executive officers (Proposal 7);

	6.	To approve a proposal to adjourn the Annual Meeting to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt Proposals 3 and/or 4 (Proposal 8); and

	7.	To approve a proposed amendment to our Articles of Incorporation to increase our authorized shares of Common Stock from 40,000,000 shares to 190,000,000 shares with a corresponding increase in the total number of authorized shares of capital stock of the Company from 50,000,000 shares to 200,000,000 shares (Proposal 3);

	8.	To approve, in accordance with 713(A) of the NYSE American Company Guide, the issuance of more than 19.99% of our outstanding Common Stock upon the exercise of certain common stock purchase warrants (Proposal 5);

	9.	To transact such other business that is properly presented at the Annual Meeting and any adjournments or postponements thereof.

	BY ORDER OF THE BOARD OF DIRECTORS

	/s/ Michael Jaffa
	Michael Jaffa
	Corporate Secretary

	PAGE

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING	3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	10
MANAGEMENT AND CORPORATE GOVERNANCE	12
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION	20
EQUITY COMPENSATION PLAN INFORMATION	32
REPORT OF AUDIT COMMITTEE	33
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS	34
PROPOSAL 1 - ELECTION OF DIRECTORS	35
PROPOSAL 2 - ratification of APPOINTMENT of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	36
PROPOSAL 3 - INCREASE OF THE AUTHORIZED SHARES OF COMMON STOCK	38
PROPOSAL 4 - APPROVAL OF REINCORPORATION FROM NEVADA TO DELAWARE	41
PROPOSAL 5 - APPROVAL OF THE WARRANT EXERCISE PROPOSAL IN ACCORDANCE WITH SECTION 713(A) OF THE NYSE AMERICAN COMPANY GUIDE	61
PROPOSAL 6 - ADVISORY VOTE ON APPROVAL OF EXECUTIVE COMPENSATION AS DISCLOSED IN THIS PROXY STATEMENT	64
PROPOSAL 7 - ADVISORY VOTE ON APPROVAL OF THE FREQUENCY OF HOLDING AN ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS	65
PROPOSAL 8 - ADJOURNMENT TO SOLICIT ADDITIONAL PROXIES	66
CODE OF CONDUCT AND ETHICS	67
OTHER MATTERS	67
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR	67

Appendix A - Certificate of Amendment	A-1
Appendix B - Plan of Conversion	B-1
Appendix C - Articles of Conversion	C-1
Appendix D - Delaware Certificate of Conversion	D-1
Appendix E - Delaware Certificate of Incorporation	E-1
Appendix F - Delaware Bylaws	F-1

	·	By Internet. Follow the instructions included in the Notice or, if you received printed materials, in the proxy card to vote by Internet.

	·	By mail. If you received a proxy card by mail, you can vote by mail by completing, signing, dating and returning the proxy card as instructed on the card. If you sign the proxy card but do not specify how you want your shares voted, they will be voted in accordance with the recommendations of our board of directors as noted below.

	·	In person at the Annual Meeting. If you attend the Annual Meeting, you may deliver a completed proxy card in person or you may vote by completing a ballot, which will be available at the Annual Meeting.

	·	“FOR” the election of each of the nominees for director (Proposal 1);

	·	“FOR” the ratification of the appointment of Baker Tilly US, LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2023 (Proposal 2);

	·	“FOR” the approval of the proposed amendment to our Articles of Incorporation to increase our authorized shares of Common Stock from 40,000,000 shares to 190,000,000 shares with a corresponding increase in the total number of authorized shares of capital stock of the Company from 50,000,000 shares to 200,000,000 shares (Proposal 3);

	·	“FOR” the approval of the proposal to change the Company’s state of incorporation from Nevada to Delaware (Proposal 4);

	·	“FOR” the approval of the proposal to approve, in accordance with Section 713(A) of the NYSE American Company Guide, the issuance of more than 19.99% of our outstanding Common Stock upon the exercise of certain common stock purchase warrants (Proposal 5);

	·	“FOR” the approval of, on an advisory basis, the compensation of our named executive officers, as disclosed in this proxy statement (Proposal 6);

	·	“FOR” the approval of, on an advisory basis, the frequency of holding an advisory vote on compensation of our named executive officers every three years (Proposal 7); and

	·	“FOR” the proposal to adjourn the Annual Meeting to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt Proposals 3 and/or 4 (Proposal 8).

	·	if you received a proxy card, by signing a new proxy card with a date later than your previously delivered proxy and submitting it as instructed above;

	·	by re-voting by Internet as instructed above;

	·	by notifying Kartoon Studios, Inc.’s Corporate Secretary in writing before the Annual Meeting that you have revoked your proxy; or

	·	by attending the Annual Meeting in person and voting in person. Attending the Annual Meeting will not in and of itself revoke a previously submitted proxy. You must specifically vote your shares at the Annual Meeting to revoke your previously submitted proxy.

Proposal 1: Elect Directors		The nominees for director who receive the most votes (also known as a “plurality” of the votes cast) will be elected. You may vote either FOR all of the nominees, WITHHOLD your vote from all of the nominees or WITHHOLD your vote from any one or more of the nominees. Votes that are withheld will not be included in the vote tally for the election of the directors. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name for the election of the directors. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote.

Proposal 2: Ratify Appointment of Independent Registered Public Accounting Firm		The affirmative vote of a majority of the shares cast affirmatively or negatively for this proposal is required to ratify the appointment of our independent registered public accounting firm. Abstentions will have no effect on the results of this vote. Brokerage firms have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. If a broker does not exercise this authority, such broker non-votes will have no effect on the results of this vote. We are not required to obtain the approval of our stockholders to select our independent registered public accounting firm. However, if our stockholders do not ratify the appointment of Baker Tilly US, LLP as our independent registered public accounting firm for 2023, the Audit Committee of our board of directors will reconsider its selection.

Proposal 3: Approve the Proposed Amendment to Our Articles of Incorporation to Increase Our Authorized Shares of Common Stock from 40,000,000 Shares to 190,000,000 Shares with a Corresponding Increase in the Total Number of Authorized Shares of Capital Stock of the Company from 50,000,000 Shares to 200,000,000 Shares		The affirmative vote of a majority of our total issued and outstanding voting capital stock is required to approve the amendment to our Articles of Incorporation to increase our authorized shares of Common Stock from 40,000,000 to 190,000,000 with a corresponding increase in the total number of authorized shares of capital stock of the Company from 50,000,000 shares to 200,000,000 shares. Abstentions will be treated as votes against this proposal. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Broker non-votes will have the same effect as a vote against this proposal.

Proposal 4: Approve the Proposal to change the Company’s State of Incorporation from Nevada to Delaware		The affirmative vote of a majority of our total issued and outstanding voting capital stock is required to approve the proposed change to the Company’s state of incorporation from Nevada to Delaware. Abstentions will be treated as votes against this proposal. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Broker non-votes will have the same effect as a vote against this proposal.

Proposal 5: Approve, in accordance with Section 713(A) of the NYSE American Company Guide, the issuance of more than 19.99% of our outstanding Common Stock upon the exercise of certain common stock purchase warrants		The affirmative vote of a majority of the shares cast affirmatively or negatively for this proposal is required to approve this proposal. Abstentions will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote.

Proposal 6: Approve an Advisory Vote on the Compensation of our Named Executive Officers		The affirmative vote of a majority of the shares cast affirmatively or negatively for this proposal is required to approve, on an advisory basis, the compensation of our named executive officers, as described in this proxy statement. Abstentions will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote. Although the advisory vote is non-binding, the Compensation Committee and the board of directors will review the voting results and take them into consideration when making future decisions regarding executive compensation.

Proposal 7: Approve an Advisory Vote on the Frequency of Holding an Advisory Vote on the Compensation of our Named Executive Officers		The frequency of holding future advisory votes on the compensation of our named executive officers — every year, every two years or every three years — receiving the greatest number of votes will be the frequency approved, on an advisory basis, by our stockholders. Abstentions will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote. Although the advisory vote is non-binding, the Compensation Committee and the board of directors will review the voting results and take them into consideration when determining the frequency of holding future advisory votes on the compensation of our named executive officers.

Proposal 8: Approve the Proposal to Adjourn the Annual Meeting to Solicit Additional Proxies if There Are Insufficient Votes at the Time of the Meeting to Adopt One or More of the Foregoing Proposals		The affirmative vote of a majority of the shares cast affirmatively or negatively for this proposal is required to approve the proposal to adjourn the Annual Meeting to solicit additional proxies if there are insufficient votes at the time of the meeting to adopt Proposals 3 and/or 4. Abstentions will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote.

	·	following the instructions provided on your Notice or proxy card; or

	·	following the instructions provided when you vote over the Internet at www.vstocktransfer com/proxy.

Name of Beneficial Owner	Amount and Nature of Beneficial Ownership (1)		Percent of Class (1)
Directors and Named Executive Officers
Andy Heyward	3,103,901	(2)	9.01%
Michael Jaffa	114,836	(3)	*
Robert L. Denton	108,800	(4)	*
Michael Hirsh	185,439	(5)	*
Anthony Thomopoulos	7,042	(6)	*
Joseph (Gray) Davis	7,030	(7)	*
Margaret Loesch	7,030	(7)	*
Lynne Segall	7,030	(7)	*
Henry Sicignano III	0		*
Dr. Cynthia Turner-Graham	7,530	(8)	*
Stefan Piëch	348,127	(9)	1.03%
All current executive officers and directors as a group (consisting of 11 persons)	3,896,764		11.21%

Name	Age	Position
Andy Heyward	74	Chief Executive Officer and Chairman of the Board of Directors
Joseph “Gray” Davis *	80	Director
Michael Hirsh	75	Director
Margaret Loesch*	77	Director
Stefan Piëch	52	Director
Lynne Segall*	70	Director
Henry Sicignano III *	55	Director
Anthony Thomopoulos *	85	Director
Dr. Cynthia Turner-Graham *	69	Director

Board Diversity Matrix for Kartoon Studios, Inc. As of June 30, 2023
	Total Number of Directors	9
		Female	Male	Non-Binary	Did Not Disclose Gender
	Part I: Gender Identity
	Directors	3	6	—
	Part II: Demographic Background
	African American or Black	1	—	—		—
	Alaskan Native or Native American	—	—	—		—
	Asian	—	—	—		—
	Hispanic or Latinx	—	—	—		—
	Native Hawaiian or Pacific Islander	—	—	—		—
	White	2	6	—		—
	Two or More Races or Ethnicities	—	—	—		—
	LGBTQ+	1
	Did Not Disclose Demographic Background	0

Director	Board	Audit Committee	Compensation Committee	Nominating Committee	Investment Committee
Andy Heyward	Chair
Joseph “Gray” Davis (1)	X	X		X	X
Michael Hirsh (2)	X
Margaret Loesch	X		X
Dr. Stefan Piëch (2)	X
Lynne Segall (3)	X	X	Chair	Chair
Henry Sicignano III (4)	X	Chair			X
Anthony Thomopoulos (1)	Vice Chair
Dr. Cynthia Turner-Graham	X
Meetings in 2022:	4	4	2	1	2

	(1)	Effective September 1, 2022, Joseph “Gray” Davis replaced Anthony Thomopoulos on the Audit Committee.
	(2)	Effective June 23, 2022, Michael Hirsh and Dr. Stefan Piëch were elected as members of our board of directors.
	(3)	Effective July 18, 2022, Lynne Segall replaced Michael Klein on the Audit Committee.
	(4)	Effective May 22, 2023, Henry Sicignano III replaced P. Clark Hallren as a member of our board of directors, as chair of the Audit Committee, and as a member of the Investment Committee.

	·	selecting, hiring, and compensating our independent auditors;

	·	evaluating the qualifications, independence and performance of our independent auditors;

	·	overseeing and monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters;

	·	approving the audit and non-audit services to be performed by our independent auditor;

	·	reviewing with the independent auditor the design, implementation, adequacy and effectiveness of our internal controls and our critical accounting policies; and

	·	preparing the report that the SEC requires in our annual proxy statement.

	·	reviewing and recommending to our board of directors the compensation of our Chief Executive Officer and other executive officers, and the outside directors;

	·	conducting a performance review of our Chief Executive Officer;

	·	reviewing our compensation policies; and

	·	if required, preparing the report of the Compensation Committee for inclusion in our annual proxy statement.

	·	identifying qualified individuals to serve as members of our board of directors;

	·	review the qualifications and performance of incumbent directors;

	·	review and consider candidates who may be suggested by any director or executive officer or by a stockholder of the Company; and

	·	review considerations relating to board composition, including size of the board, term and age limits, and the criteria for membership of the board.

	·	review the investment policy, strategies, transactions and programs of the Company and its subsidiaries to ensure they are consistent with the goals and objectives of the Company;

	·	evaluate and approve or disapprove each proposed material investment on behalf of the Company;

	·	determine whether the investment policy is consistently followed and that procedures are in place to ensure that the Company’s investment portfolio is managed in compliance with its policies;

	·	review the performance of the investment portfolios of the Company and its subsidiaries; and

	·	approve and revise, as appropriate, the Company’s investment policies and guidelines.

	·	junk mail and mass mailings;

	·	resumes and other forms of job inquiries;

	·	surveys; and

	·	solicitations or advertisements.

Name	Age	Position

Andy Heyward	74	Chief Executive Officer and Chairman of the Board of Directors

Robert L. Denton	63	Chief Financial Officer

Michael A. Jaffa	57	Chief Operating Officer and Corporate Secretary

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($) (1)	Option Awards ($) (1)	All Other Compensation ($)	Total ($)
Andy Heyward (2)	2022	440,000	220,000	–	–	775,000	1,435,000
Chief Executive Officer	2021	440,000	212,987	–	–	543,750	1,196,737

Michael A. Jaffa (3)	2022	374,871	150,000	–	–	–	524,871
Chief Operating Officer, General Counsel and Corporate Secretary	2021	326,326	25,000	–	–	–	351,326

Michael Hirsh (4)	2022	323,512	–	390,000	316,481*	–	1,029,993
Chief Executive Officer of Frederator and Mainframe Studios

(1)	The aggregate fair value of the stock awards and stock option awards on the date of grant was computed in accordance with FASB ASC Topic 718.

(2)	Mr. Heyward entered into a five-year employment agreement on December 7, 2020, pursuant to which is entitled to an annual salary of $440,000.

	During 2022, Mr. Heyward was paid $775,000 in producer fees and earned $220,000 in discretionary bonuses.

(3)	Mr. Jaffa entered into a three-year employment agreement on December 7, 2020. Under his employment agreement, Mr. Jaffa is entitled to an annual salary of $325,000 the first year, $350,000 the second year and $375,000 the third year and an annual signing bonus of $50,000 each year.

	On December 7, 2020, the Company granted 100,000 stock options to Mr. Jaffa with a strike price of $13.90 and a term of 10 years. 40,000 of the options vested on the grant date with the remaining options vesting 20,000 each of the next three years. On December 7, 2020, the Company also granted 50,000 RSUs to Mr. Jaffa. The RSUs vest 16,667 on the first anniversary, 16,667 on the second anniversary and 16,667 on the third anniversary.

(4)	Effective April 7, 2022, the Company entered into an employment agreement with Mr. Hirsh, whereby Mr. Hirsh agreed to serve as the Chief Executive Officer of the Company’s wholly owned subsidiaries WOW Unlimited Inc. and its subsidiaries Mainframe Studios and Frederator for a period of three years in consideration for an annual salary of $440,000. Mr. Hirsh is also entitled to earn $12,400 as an executive producer fee per 30 minute broadcast episode. In addition, on June 23, 2022, Mr. Hirsh was granted 50,000 RSUs with a fair value of $390,000 and 50,000 options with an exercise price of $7.80 per share, with a fair value of $316,481 on the grant date. The RSUs and options vest 16,666 on the first anniversary, 16,666 on the second anniversary and 16,667 on the third anniversary.

	Option Awards										Stock Awards
Name	Number of securities underlying unexercised options (#) exercisable			Number of securities underlying unexercised options (#) unexercisable			Option exercise price ($)		Option expiration date		Equity incentive plan awards: Number of securities underlying unearned Restricted Stock Units (#)			Market Value of Shares ($)
Andy Heyward		500,000	(1)		–			13.90		12/07/30		1,031,250	(2)		14,343,525
Michael A. Jaffa		8,509	(3)		–			20.90		04/16/23		–			–
		1,500	(3)		–			19.90		03/07/24		–			–
		80,000	(4)		20,000	(4)		13.90		12/07/30		16,667	(5)		231,669
Michael Hirsh		58,270	(6)		–			14.94 16.63		04/05/25		–			–
		–			9,699	(6)		5.14		02/10/26		–			–
		–			50,000	(7)		7.80		06/23/32		50,000	(7)		390,000

(1)	Mr. Heyward’s options vested upon the grant date.

(2)	Of the 375,000 time-based RSUs previously issued to Mr. Heyward, 93,750 vested on the first anniversary date of December 20, 2021 and 93,750 vested on the second anniversary date of December 31, 2022. On June 23, 2021, the Compensation Committee amended 375,000 unvested service-based awards and 750,000 unvested performance-based awards previously issued to Mr. Heyward, such that the RSUs shall vest based on performance or market conditions. The total unvested RSUs of 1,125,000 were modified to vest as follows: (i) 375,000 RSUs vest when the closing sale price of the common stock equals or exceeds $30.00 per share or the Company’s market capitalization equals or exceeds $903,000,000 for 20 consecutive trading days; (ii) 375,000 RSUs vest when the closing sale price of the common stock equals or exceeds $35.00 per share or the Company’s market capitalization equals or exceeds $1,053,500,000 for 20 consecutive trading days, and (iii) 375,000 RSUs vest when the closing sale price of the common stock equals or exceeds $37.50 per share or the Company’s market capitalization equals or exceeds $1,128,750,000 for 20 consecutive trading days (the “market conditions”). In the event the stock price and market capitalization vesting conditions set forth above are not achieved, such 1,125,000 RSUs may vest in four equal installments on the first, second, third and fourth anniversaries of December 7, 2020, based on achievement of certain other operating performance-based vesting conditions established by the Compensation Committee on June 23, 2021 and subject to his continued employment, adjusted pro-ratably for vesting pursuant to the market conditions above. On April 7, 2022, 281,250 of the 1,125.000 modified RSUs vested upon the achievement of completing the Wow and Ameba acquisitions.

(3)	Mr. Jaffa’s options vested as of December 31, 2021.

(4)	40,000 of Mr. Jaffa’s options vested upon grant and 20,000 vested on the first anniversary date of December 7, 2021 and 20,000 vested on the second anniversary of December 7, 2022. The remaining 20,000 options will vest on December 31, 2023.

(5)	16,666 of Mr. Jaffa’s RSUs vested on the first anniversary date of December 7, 2021 and 16,666 vested on the second anniversary of December 7, 2022. The remaining 16,668 RSUs will vest on December 7, 2023.

(6)	On April 7, 2022, Mr. Hirsh was granted 67,969 of replacement option awards to purchase the Company's common stock subject to providing continued service to the Company after acquisition of Wow. The number of shares granted and the exercise prices were based on an exchange ratio upon the acquisition date and the vesting terms remained the same as the original awards previously granted by Wow. The options expire within 3 years from the replacement option grant date or the original Wow option, whichever is greater. Of the replacement options granted to Mr. Hirsh, 58,270 were vested previous to the acquisition date and will expire on April 5, 2025 and 9,699 will vest on February 10, 2024 and expire on February 10, 2026.

(7)	On June 23, 2022, Mr. Hirsh was granted 50,000 RSUs with a fair value of $390,000 and 50,000 options with an exercise price of $7.80 per share, with a fair value of $316,481 on the grant date. The RSUs and options vest 16,666 on the first anniversary, 16,666 on the second anniversary and 16,667 on the third anniversary.

	Andy Heyward (1)					Michael Hirsh (1)
Year	Summary Compensation Table Total (2)		Compensation Actually Paid			Summary Compensation Table Total (2)		Compensation Actually Paid		Average Summary Compensation Table Total for Non-PEO NEOs (3)		Average Compensation Actually Paid to Non-PEO NEOs (4)			Value of Initial Fixed $100 Investment Based on Cumulative TSR (5)			Net Loss (in millions) (6)
2022	$	1,450,384	$	(5,369,928	)	$	1,215,089	$	938,817	$	488,168	$	143,658		$	(66.30	)	$	(45,595	)
2021	$	1,196,737	$	(3,593,888	)		n/a		n/a	$	338,495	$	(47,571	)	$	(23.91	)	$	(129,291	)

(1)	During 2022, our Chief Executive Officers were Andy Heyward and Michael Hirsh. Michael Hirsh started serving as a Chief Executive Officer during 2022. Andy Heyward served as our only Chief Executive Officer during 2021.

(2)	The values reflected in this column reflect the “Total” compensation set forth in the Summary Compensation Table (“SCT”) in the Company’s most recently filed Form 10-K. See the footnotes to the SCT for further detail regarding the amounts in this column.

(3)	The dollar amounts reported in this column represent the average of the amounts reported for Non-PEO NEOs in the “Total” column of the SCT in each applicable year. The names of each of the Non-PEO NEOs included for purposes of calculating the average amounts in each applicable year are Robert L. Denton and Michael A. Jaffa.

(4)	The dollar amounts reported in this column represent the average amount of CAP to Non-PEO NEOs as a group, as computed in accordance with SEC rules described below.

(5)	The cumulative total shareholder return (“TSR”) amounts reported in this column are calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. The Company did not issue dividends during either of the covered periods.

(6)	The dollar amounts reported in this column are the Company’s net income amounts reflected in the Company’s audited financial statements for the applicable year.

	Andy Heyward			Michael Hirsh
Reported Summary Compensation Table Total for 2022	$	1,450,384		$	1,215,089
Deduct: Fair Value of Equity Awards Under the "Stock Awards" and "Option Awards" Column in SCT		–			(706,481	)
Add: Year End Fair Value of Equity Awards Granted During the Year that are Outstanding and Unvested		–			430,209
Add: Change in Year Over Year End Fair Value of Equity Awards Granted in Prior Years that are Outstanding and Unvested		(6,032,813	)		–
Add: Change in Prior Year End Fair Value and Vesting Date Fair Value of Equity Awards Granted in Prior Years that Vested During the Year		(787,500	)		–
Compensation Actually Paid for 2022	$	(5,369,928	)	$	938,817

Reported Summary Compensation Table Total for 2021	$	1,196,737			n/a
Add: Change in Year Over Year End Fair Value of Equity Awards Granted in Prior Years that are Outstanding and Unvested		(4,640,625	)		n/a
Add: Change in Prior Year End Fair Value and Vesting Date Fair Value of Equity Awards Granted in Prior Years that Vested During the Year		(150,000	)		n/a
Compensation Actually Paid for 2021	$	(3,593,888	)		n/a

	Average Non-PEO NEOs
Average Reported Summary Compensation Table Total for 2022	$	488,168
Add: Average Change in Year Over Year End Fair Value of Equity Awards Granted in Prior Years that are Outstanding and Unvested		(208,035	)
Add: Average Change in Prior Year End Fair Value and Vesting Date Fair Value of Equity Awards Granted in Prior Years that Vested During the Year		(136,475	)
Average Compensation Actually Paid for 2022	$	143,658

Average Reported Summary Compensation Table Total for 2021	$	338,495
Add: Average Change in Year Over Year End Fair Value of Equity Awards Granted in Prior Years that are Outstanding and Unvested		(283,072	)
Add: Average Change in Prior Year End Fair Value and Vesting Date Fair Value of Equity Awards Granted in Prior Years that Vested During the Year		(102,994	)
Average Compensation Actually Paid for 2021	$	(47,571	)

Name	Year	Fees Earned or Paid in Cash ($) (1)	Option/RSU Awards ($) (2)	All Other Compensation ($)	Total ($)

Joseph “Gray” Davis (3)	2022	51,250	–	–	51,250
P. Clark Hallren (4)	2022	60,000	–	–	60,000
Margaret Loesch (5)	2022	40,000	–	90,000	130,000
Lynne Segall (6)	2022	52,500	–	–	52,500
Anthony Thomopoulos (7)	2022	53,750	–	37,500	91,250
Dr. Cynthia Turner-Graham (8)	2022	40,000	–	–	40,000
Michael Hirsh (9)	2022	–	706,481	–	706,481
Stefan Piëch (10)	2022	–	–	–	–

(1)	Directors, other than Mr. Heyward and Mr. Hirsh, earn $10,000 for each quarterly meeting attended. Directors, other than Mr. Heyward, Mr. Hirsh and Mr. Piëch, also earn $10,000 as appointed Chairman and $5,000 as members of the Company’s Compensation, Audit, Investment and Nominating Committees.

(2)	Represents the grant date fair value in accordance with FASB ASC Topic 718. The assumptions applied in determining the fair value of the awards are discussed in the Notes to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022.

(3)	Mr. Davis was paid $40,000 for services on the board of directors, $1,250 as a member of the Company's Audit Committee, $5,000 as a member of the Company’s Nominating Committee and $5,000 as a member of the Company’s Investment Committee.

(4)	Mr. Hallren was paid $40,000 for services on the board of directors, $10,000 as Chair of the Company’s Audit Committee, $5,000 as a member of the Company’s Compensation Committee and $5,000 as a member of the Company’s Investment Committee. Mr. Hallren resigned from his position as a director of the Company as of May 22, 2023.

(5)	Ms. Loesch was paid $40,000 for services on the board of directors for 2022 and $90,000 for services as Executive Chairperson of the Kartoon Channel!

(6)	Ms. Segall was paid $40,000 for services on the board of directors and $10,000 as the Chair of the Company’s Nominating Committee.

(7)	Mr. Thomopoulos was paid $40,000 for services on the board of directors, $3,750 as a member of the Company's Audit Committee, $10,000 as Chair of the Company’s Compensation Committee and $37,500 for other consulting services.

(8)	Dr. Cynthia Turner-Graham was paid $40,000 for services on the board of directors.

(9)	On June 23, 2022, Mr. Hirsh was granted 50,000 RSUs with a fair value of $390,000 and 50,000 options with an exercise price of $7.80 per share, with a fair value of $316,481 on the grant date. The RSUs and options vest 16,666 on the first anniversary, 16,666 on the second anniversary and 16,667 on the third anniversary.

(10)	Effective June 23, 2022, Dr. Stefan Piëch was elected as a member of our board of directors.

	(a)	(b)		(c)
Plan category	Number of securities to be issued upon exercise of outstanding options, vesting of restricted stock units and other rights	Weighted-average exercise price of outstanding options, restricted stock units and other rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by stockholders	3,118,095	$	18.80	98,672
Equity compensation plans not approved by stockholders	–	–		–
Total	3,118,095	$	18.80	98,672

	·	Reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2022 with management and Baker Tilly, our independent registered public accounting firm;

	·	Discussed with Baker Tilly the matters required to be discussed in accordance with Auditing Standard No. 16-Communications with Audit Committees; and

	·	Received written disclosures and the letter from Baker Tilly regarding its independence as required by applicable requirements of the Public Company Accounting Oversight Board regarding Baker Tilly communications with the Audit Committee and the Audit Committee further discussed with Baker Tilly their independence. The Audit Committee also considered the status of pending litigation, taxation matters and other areas of oversight relating to the financial reporting and audit process that the committee determined appropriate.